Y Pwyllgor Llywodraeth Leol a Thai

Local Government and Housing Committee

17/11/2021

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies AS
Carolyn Thomas AS
Joel James AS
John Griffiths AS Cadeirydd y Pwyllgor
Committee Chair
Mabon ap Gwynfor AS
Sam Rowlands AS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Anna Hind Cyfreithiwr y Llywodraeth, Llywodraeth Cymru
Government Lawyer, Welsh Government
Francois Samuel Pennaeth Polisi Rheoliadau Adeiladu, Llywodraeth Cymru
Head of Building Regulations Policy, Welsh Government
Julie James AM Y Gweinidog Newid Hinsawdd
Minister for Climate Change
Professor Mark Tewdwr-Jones Athro ym maes dinasoedd a rhanbarthau, Coleg Prifysgol Llundain
Professor of cities and regions, University College London
Professor Nick Gallent Athro ym maes tai a chynllunio, Coleg Prifysgol Llundain
Professor of housing and planning, University College London

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Catherine Hunt Ail Glerc
Second Clerk
Chloe Davies Dirprwy Glerc
Deputy Clerk
Jonathan Baxter Ymchwilydd
Researcher
Manon George Clerc
Clerk
Osian Bowyer Ymchwilydd
Researcher
Stephen Davies Cynghorydd Cyfreithiol
Legal Adviser

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu’r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:33.

The committee met by video-conference.

The meeting began at 09:33.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Welcome, everyone, to this meeting of the Local Government and Housing Committee. The public items of this meeting are being broadcast live on Senedd.tv, and all participants are taking part by video-conference. The meeting is bilingual and simultaneous translation is available. A Record of Proceedings will be published as usual. Aside from the procedural adaptation relating to conducting our proceedings remotely, all other Standing Orders for committees remain in place. Could I ask Members if there are any declarations of interest? I see that there are not. Let me just say that if I drop out of proceedings, out of this meeting, for any reason, the committee has agreed that Alun Davies MS will temporarily chair while I try to rejoin the meeting.

2. Papurau i’w nodi
2. Papers to note

Papers to note is item 2 of our meeting today. We have paper 1, a letter from the Minister before us at the moment, Julie James, the Minister for Climate Change, following her evidence session before the committee on 22 September. Paper 2 is a letter from the Minister for Finance and Local Government, following again an evidence session before the committee on the same date, 22 September. Paper 3 is a letter to the Petitions Committee in relation to second homes. Paper 4 is a letter from the Legislation, Justice and Constitution Committee in relation to the Residential Property Tribunal Wales and the Adjudication Panel for Wales and the annual reports for 2020-21. And paper 5 is a letter again from Julie James, the Minister for Climate Change, in relation to the Leasehold Reform (Ground Rent) Bill legislative consent motion. We will be returning to some of these matters in the subsequent part of this meeting today. For the moment, are Members content to note those papers? Mabon.

09:35

Gadeirydd, yn y llythyr gan y Gweinidog cyllid, yn ei brawddeg olaf ond un, os dwi'n cofio, mae'n sôn am argymhellion neu ymchwiliad i mewn i newid cyllideb llywodraeth leol. Mae yna botensial i hynny gael goblygiadau pellgyrhaeddol ar ariannu llywodraeth leol. Roeddwn i'n meddwl tybed a oes yna amser yn mynd i fod efo ni yn ein rhaglen waith ni i edrych ar hynny. Mae hi'n cynnig ein bod ni'n edrych ar yr argymhellion hynny a'r papur hwnnw; tybed a ydym ni'n mynd i fedru neilltuo amser ar gyfer hynny rhywbryd yn y dyfodol agos.

Chair, in the letter from the Minister for finance, in her penultimate sentence, I believe, she mentions an inquiry into changes to local government budgets. That could have far-reaching impacts on local government funding. I was wondering if we would have time in our work programme to look at that issue. She proposes that we do look at those recommendations and that paper; I wonder if we are going to be able to allocate time for that at some point in the near future.

We certainly could do, Mabon. Obviously, we'll have our scrutiny of the budget, including that particular set of responsibilities relating to local government, to undertake in the usual way, so it will be a matter as to whether committee would like to do something in addition to that. So, perhaps we could give that a little thought, as you've raised the matter, Mabon, and return to it.

Is that okay? Okay. Is committee content to note the papers, subject to the point that Mabon has just made? Yes. Okay.

3. Y Memorandwm Cydsyniad Deddfwriaethol ar gyfer y Bil Diogelwch Adeiladu - sesiwn dystiolaeth gyda'r Gweinidog Newid Hinsawdd
3. Building Safety Bill LCM - evidence session with the Minister for Climate Change

We move on, then, to item 3, the Building Safety Bill legislative consent memorandum and evidence today from the Minister for Climate Change. The committee requested this session at its meeting on 3 November to inform its report on this particular LCM. I'm very pleased to welcome today Julie James MS, Minister for Climate Change, and I think two of your officials, Minister—Anna Hind, Government lawyer and Francois Samuel, head of building regulations policy. Welcome to you all. If you're content, Minister, we'll go immediately to questions.

Okay. Firstly, if I might begin: why is the Welsh Government using the UK Government's Building Safety Bill to legislate for Wales, given the overriding principle of Welsh Government that legislation in devolved areas should be enacted by the Senedd?

Thank you, Chair. It's a fair question, but we believe that, in the light of the Grenfell tragedy and the need to respond to the subsequent independent review of building regulations—the Hackitt review that Members will be familiar with—we need to respond as quickly as possible, and this Bill is the most effective way to do that. We've made it clear as a Government that, whilst protecting the devolution settlement remains a critical area of priority for us and that our general principle is to legislate in the Senedd, we should be open to taking a pragmatic approach to using UK legislation to achieve the Welsh Government's objectives where that's necessary and it completely suits our policy agenda.

In this particular instance, there might be negatives if we waited for a Wales Bill, which are all around delay. We will have a building safety Bill coming through in Wales, there are some specific things we want to do, but in this particular Bill, we're very satisfied that the provisions in it are provisions that we would enact in Wales if we were doing it now, and that it is not in Wales's best interests to fall behind these provisions in England. These are protections—very necessary protections—for residents in high-risk residential blocks, and we feel the need to put those into place as soon as is possible. This Bill represents the best opportunity for that.

Okay. Thank you for that, Minister. Could I just ask you whether you have any concerns, nonetheless, that Senedd Members have not had the opportunity to scrutinise in detail this particular Bill, its scope and its impact, given the importance of scrutiny to the democratic process, and indeed, the importance of scrutiny in terms of getting the legislation right?

I do absolutely acknowledge that, Chair. This is a wide-ranging Bill and it is a real shame that it won't receive the fullest of Senedd scrutiny. That's why we've offered for the officials to go through a clause-by-clause briefing, if the committee wants that, to provide the committee with the fullest possible understanding of what the Bill provides for Wales, and also offered to provide details on all the delegated powers in the Bill, if that would help the committee. I absolutely do acknowledge that it's clearly better if we do do a Senedd Bill, but the delay that that introduces and the call on our resources in order to do it, I think, outweighs the need for that full scrutiny. Though, Chair, I am anxious to make sure that we can get the best scrutiny possible for this Bill, as I completely acknowledge the point.

09:40

Okay. I'm sure the committee will want to avail itself of the further information, Minister. Alun Davies. 

Thank you. There's a difference between a technical briefing and scrutiny, of course, a fundamental difference; they're not the same thing and I don't think we should ever seek to equate them. But, can I challenge you, Minister, on some of these assertions that we need to essentially rush this through Westminster rather than legislate ourselves? These provisions have been some years in the development. When I was the Minister, I was involved with some of this stuff over two years ago. So, I don't understand—sorry, the dog is getting excited about these matters—why we need to suddenly rush through an LCM without any form of democratic scrutiny in Wales when this Bill has been in development for something over two years. 

I take your point, Alun. You will know the complexity of it, since you were involved. You'll remember the complexity of the expert panels that we've had looking at these maters and so on. Just to be clear, I don't agree there's no scrutiny, I agree there isn't the fullest scrutiny. I am here today because I think there should be scrutiny of the Bill and the process. That's why we're offering the officials. But I agree it's not the fullest scrutiny.

But we're not scrutinising you on the Bill, Minister, with all due respect, we're scrutinising you on the LCM. That's different.

It's not scrutiny of the legislation itself. We're not having Stage 1 scrutiny at all. We're not having any line-by-line scrutiny. So, either a technical briefing—. I'm very grateful to you for your time this morning, but half an hour on an LCM does not equate to democratic scrutiny.

Well, as I say, I appreciate the point and acknowledge the concern, for sure. At the same time, we have a really serious problem in building safety in Wales. We've done a lot of expert work about what that should look like. This Bill does represent an ideal opportunity to do that as fast as possible for the people of Wales. You'll remember, then, Alun, from your work on it that the programme for reform recognises the two distinct stages in the life of a building: that's the design and construction phase, and the occupation phase. This is the design and construction phase we're talking about here. This is what this Bill addresses, or begins to address. Because the market for design and construction is an England-and-Wales market—we have nobody who builds high-rise buildings in Wales who doesn't build them also in England, there is no small SME Welsh contractor that builds those kinds of buildings—we absolutely think that it's necessary to have the same regime across the border for that, for the operation of the market and, frankly, for the operation of the taxes that the UK Government has put in place and so on.

No, we don't believe that. We don't believe that. We legislate—

I believe it, Alun. I don't think you're in a position to tell me what I believe. Forgive me, Chair.

Well, I'm saying 'we', because we as a Senedd have legislated on, for example, sprinkler legislation, which had quite significant opposition from the construction industry. But, we legislated because we felt it was the right thing to do. I say 'we' in the collective Senedd sense. We legislated on that. I think it was the first private Member's legislation that actually was enacted.

It was, and it was about the inclusion of something in construction. This is about the management and control of the design and construction, not the actual construction or its architectural merit. This is about the design and control. So, this is about, for example, who does the building control, what are the legal aspects of which plans should be deposited where, and so on. This is about the control mechanisms. One of the problems with Grenfell and the subsequent problem with all of the building safety issues is that it is not at all clear, for the poor people who live in those buildings now, whose responsibility it is to maintain them or remediate defects and so on. So, this is all about putting, from the point in time onwards—. It's not retrospective, of course, but from the point in time that this is in place, this is about having a control and management system in place for those buildings that designates the legal responsibility. So, that's what we're talking about. So, we're not talking about the inclusion or not inclusion of various bits of the building, and then there'll be an occupation phase.

Now, in Wales, we have a very specific set of things we want to do for the occupation phase because we have a very different approach to the UK Government. But, for the design and construction phases in terms of control, with one exception, we have a very similar approach, the exception being that, in England, there's going to be a separate building control function, and we are giving it to our local authorities here in Wales because we have a very much better relationship with our local authorities and we think that that's an unnecessary level of bureaucracy. 

But, other than that, we think the system of control needs to be similar for those building firms that work across the border. 

09:45

Diolch yn fawr iawn, Weinidog. Gobeithio eich bod chi'n well gyda llaw; diolch am ddod yma y bore yma. Jest i nodi i gychwyn, mae ateb y Llywodraeth yn hyn o beth yn bryderus o fy ran i yn sicr. Mae'n swnio'n gynsail peryglus iawn i ddweud, ar yr un llaw, oherwydd bod yna system debyg rhwng Cymru a Lloegr, fod yna orfodaeth felly i ni glymu fewn i drefn Lloegr o weithredu. Mae hynny'n gynsail peryglus iawn i ddatganoli, beth bynnag arall, ac mae'n ymddangos i fi eich bod chi'n methu cael hi'r ddwy ffordd—ar yr un llaw yn dweud oherwydd y commonality yma dŷch chi'n dweud sydd rhwng Cymru a Lloegr, fod rhaid cael trefn ar y cyd, ond yna, pan fydd e'n dod i bobl yn byw yno, mae Cymru eisiau bod yn wahanol iawn ac felly rydyn ni'n gweithredu polisïau gwahanol iawn. Pwynt datganoli ydy galluogi Cymru i weithredu polisïau gwahanol yn unol â'n gwerthoedd ni a'n anghenion ni, ac yn unol, felly, â llais a beth mae pobl Cymru yn ei ddweud, sydd yn dod â ni nôl at bwynt Alun am y diffyg yna mewn craffu a bod angen i lais Cymru gael ei glywed wrth graffu deddfwriaeth o amgylch diogelwch adeiladu. Ond dim ond gwneud sylw ydy hynny. 

O ran y Bil yma, a'ch defnydd chi o'r Bil yma yng Nghymru, sut mae defnyddio'r Bil hwn i ddeddfu dros Gymru, felly, yn rhan o raglen ehangach Llywodraeth Cymru ar gyfer diwygio diogelwch adeiladu? A dwi'n nodi eich bod chi wedi sôn eich bod chi am ddod â Bil Cymreig ger ein bron ni ar ryw bwynt. Oes amserlen, felly, gennych chi ar gyfer cyflwyno Bil diogelwch adeiladu eich hun?

Thank you very much. Minister. I hope you're better, and thank you for joining us this morning. Just to note at the outset that the Government's response in this regard is concerning from my point of view. It sounds like a very dangerous precedent to say, on the one hand, that because there is a similar system in England and Wales that we are required to be involved with the English approach. That's a very dangerous concern for devolution if nothing else, and it appears to me that you can't have it both ways—on the one hand saying that because of this commonality between England and Wales, we have to have a joint system, but then, when it comes to people living there, Wales wants to be very different and that we are operating different policies. The point of devolution is to enable Wales to implement different policies in line with our principles and our needs, and in accordance with the voice of the Welsh people, which brings us back to Alun's point about that lack of scrutiny and that the voice of Wales needs to be heard in scrutinising legislation around building safety. But that's just a passing comment. 

In terms of this Bill and your use of the Bill in Wales, how does using this Bill to legislate for Wales fit into the Welsh Government's wider programme for building safety reform? And I note that you mentioned that you want to bring a Welsh Bill forward at some point. So, do you have a timetable for the introduction of your own building safety Bill?

Diolch, Mabon. So, just to reiterate, I don't think I quite said what you said in your comments. I didn't say it was necessary; I said it was expedient. It would get us the changes for the people of Wales more quickly. So, I didn't say that we had to do this and there was no other way to do it. I said that, in our judgment, this was the expedient and timely way to do it, and didn't put any detriment onto the people of Wales. I don't think that's quite the same thing as saying that we have to do it. We certainly do not have to do it, just to be clear; we think it's an expedient way to do it. 

We've negotiated a flexibility into the Bill so that a later Bill could change these rules if we wanted to here in Wales. So, it doesn't take anything away from us in terms of flexibility. 

We are including a Senedd building safety Bill in this term of Government, but, as yet, I'm not sure precisely which year that's going to be in. That depends very much on the rest of the legislative programme, time in Plenary, time in committees and so on. We've had this discussion in this committee a number of times as this committee has a heavy burden of Bills from my portfolio, and I'm sure you have Bills from other portfolios as well. So, it is all about trying to get the timing right for both the scrutiny and for the Government's programme and the Plenary. So, in discussion about what the timing for the Wales building safety Bill will be, certainly it will not be in the time frame that this Bill allows us in terms of bringing in the new system. So, I hope that explains it slightly better. 

I do have two officials on the call, Chair, who know this absolutely back to front if you want to get a lot more detail from them. 

Wel, dwi'n nodi eich bod chi'n dweud ei fod yn y rhaglen lywodraethol ryw ben. Mae e'n bryderus, wrth gwrs, fod gennym ni ddim amserlen ar ei gyfer o. Mi fuasai fo'n ddefnyddiol i ni, ac yn sicr i fi, dwi'n siŵr, pe bai gennym ni ryw amserlen cliriach, ond yn derbyn bod yna raglen drom o ddeddfu gennych chi. 

Well, I note that you say that it's in the programme for government and will be brought forward at some point. It's concerning that we don't have a timetable for it. It would be useful for us, and for me certainly, if we did have a clearer timescale, but I do accept that there is a heavy programme of legislation. 

So, just on that, Chair, as you know, we do this year by year. So, we're currently talking about the next year's set of arrangements. This is a complex series of things, which I'm sure Alun Davies will remember from his time in Government also, where you're trying to balance the marshalling of the Government's resources to bring the Bill to fruition, alongside the timetable for both committee and Plenary timetabling, so that everybody isn't overwhelmed with six Bills all at the same time. And, frankly, that's on the Government side as well, because we have the same lawyers being moved around different Bills as they each come to the top of the pile. So, it is a complex timetabling system. We are very clear that a building safety Bill is an urgent need for the people of Wales and that we want to bring it forward as fast as possible. And that's why, of course, we're piggybacking on the UK Bill, which is going slightly faster than us in terms of the design and construction phase. So, I hope that's clearer, Mabon, but it is a discussion between both bits of the Commission and the Government about the way the timetabling works.

09:50

Diolch, Gadeirydd. Os caf i felly fynd ymlaen i ail gwestiwn, gennych chi, os yw'r Gadair yn hapus.

Thank you, Chair. If I could move on to my second question, if the Chair's content.

Dwi eisiau ymhelaethu ychydig ar bwyntiau ddaru Alun Davies eu gwneud ynghynt, o ran y craffu. Mae e'n bryder rydyn ni wedi ei nodi'n flaenorol am beth rydyn ni'n ei fynegi sy'n ddiffyg craffu ar ddatblygiad y Bil. Ac mi rydych chi wedi dweud eich bod chi ger ein bron ni heddiw, er enghraifft, a'ch bod chi'n fodlon derbyn craffu. O ystyried hynny, pa waith ymgysylltu y mae Llywodraeth Cymru wedi ei wneud efo rhanddeiliaid yng Nghymru ar y gwaith o ddatblygu'r Bil yma? Allwch chi, hwyrach, ymhelaethu ar y safbwyntiau sydd wedi cael eu mynegi gan randdeiliaid, a phwy ydych chi wedi siarad â nhw, os gwelwch yn dda?

I want to expand on the points made by Alun Davies earlier, in terms of scrutiny. It is a concern that we've previously stated in terms of what we see as a lack of scrutiny on the development of this Bill. And, for example, you've said that you're appearing before us today and that you're willing to accept scrutiny. So, given that, what engagement work has the Welsh Government done with stakeholders in Wales on the development of this Bill? Can you perhaps elaborate on the views expressed by stakeholders, and tell us who you've spoken to?

Thank you, Mabon. So, our White Paper consultation, and all the supporting events that went around it, set out our intentions to utilise the UK Building Safety Bill. Ahead of the announcements of responses, and our Government response, which will be published later this year, there was clear support for the White Paper proposals generally, both in terms of elements common with England, for the dutyholders, the gateway stages, and the golden thread, as it's called, that runs through, and the Wales-bespoke elements, which were the local authority as the regulator, which I mentioned in my earlier answer, for high-risk buildings. And also, it gives the Welsh Ministers power to define high-risk buildings, so it's not limited to over 18m, or whatever it is that the English Bill decides; that's for us to do. I anticipate that both the summary and the Government response will be published before the end of the year, and, therefore, before the Senedd is asked to vote on this motion. So, you'll be able to see the full set of those before a vote in the Senedd.

Diolch yn fawr iawn, Weinidog. Ond o ran—. Sori, dwi'n gweld bod Carolyn Thomas eisiau dod mewn, Gadeirydd. Ydy hi'n iawn i fi alluogi Carolyn i ddod i mewn?

Thank you very much, Minister. But, in terms of—. Sorry, I can see that Carolyn Thomas wants to come in, Chair. Is it okay for me to allow Carolyn to come in?

Thank you. Regarding local authorities having a responsibility in building control, which I think is the right thing to do, it's just that accumulative responsibilities are being put on local authorities in the time of budget restraints. We've had 10 years of austerity, and it's impacted really on councils' budgets. And Mabon referred to it earlier, when we had the letter from the finance Minister. So, local authorities took on the responsibility of sustainable drainage systems recently, and I know that's caused an area of concern. And they did try to speak with officials and Ministers at the time—the Deputy Minister—to talk about the impact, the cost of it. And I know, in one authority, the cost implication was £130,000 a year, and it's holding up planning at the moment. If local authorities have to take on responsibility for this with building controls, I know some of the departments are very lean now. And then, later on, we're also looking at the paper regarding second homes and maybe using local authorities to enforce, with their planning enforcement department. So, I'd like to just know, regarding the consultation with local authorities, did they raise this as an issue, regarding having the resources to do this?

So, the short answer to that, Carolyn, is 'yes', of course we consulted them. Our local authorities were not keen on the English system of a new building safety regulator that would remove the function from local authorities. So, they were not keen on that at all. They were very keen to retain the function and work with us to see how that function would operate. I was very keen on that myself. Also, I don't think making a new regulator is a good plan at all.

Obviously, I can't comment on the budget—we're going towards the budget now—but you'll know that this Government has been protecting local authority budgets, certainly over the last few years since we've been able to do so as a result of the so-called end of austerity. We will be very keen that they are properly resourced to do this because this is fundamental to the way that the new building system will operate.

09:55

Thank you. Yes, I do agree, and sorry it wasn't clear. It is the right thing to do—have the responsibility with the local authority. It was just the extra strain on the finance, that's all, so, thank you.

Diolch, Carolyn. Dwi'n meddwl bod Carolyn wedi gwneud pwyntiau pwysig yn fanna am randdeiliaid sydd yn cael eu hymgynghori a beth ydy eu barn nhw. Ac os caf i orffen ar y pwynt yna o ran fy nghwestiynau i felly, yn mynd ymlaen o'r hyn yr oeddwn i'n gofyn ynghynt ynghylch rhanddeiliaid yn cael ymgynghoriad, dwi'n deall, o ran y craffu sydd yn digwydd yn San Steffan, nad oes yna Aelodau Seneddol o Gymru ar y pwyllgor a fydd yn craffu ar hwn. Felly, beth ydy llais Cymru yn hyn o beth? Mae'n dda o beth, hwyrach, fod yna Bapur Gwyn yn mynd i fod ger ein bron ni, ond pa randdeiliaid o Gymru sydd hyd yma wedi bod yn rhan o'r broses ac a fydd yn rhan o'r broses yng Nghymru er mwyn sicrhau bod llais Cymru yn cael ei glywed wrth ichi ddatblygu hyn yng Nghymru?

Thank you, Carolyn. I think Carolyn made some important points there in terms of stakeholders who are being consulted with and what their views are. If I can just conclude on that point in terms of my questions, moving on from my earlier question on consultation and stakeholders, I understand, in terms of the scrutiny happening at Westminster, that there aren't any Welsh MPs on the committee that is to scrutinise this Bill. So, where is the Welsh voice in all of this? It's good that there is going to be a White Paper before us, but what Welsh stakeholders have to date been a part of the process and will be part of the process in Wales in order to ensure that the Welsh voice is heard in the development of this in Wales?

Yes, thank you, Mabon. I believe we did make it very clear in the White Paper—the 'Safer Buildings in Wales' White Paper—that we were going to utilise the Bill and set out its fundamental features and so on. The consultation responses were broadly supportive. There wasn't a question that said, 'Should we wait for a Senedd opportunity?', I will say. But we did make it clear that we were looking to use a UK Bill, should one be available, and the consultations were broadly supportive of that. We will publish the summary of all the responses and so on, as I said, before the Senedd is asked to vote on this. So, we will do that. 

I can't emphasise enough the need to get this sorted out. We've still got buildings going up in Wales now that are subject to the old regime. We really do need to get this sorted as fast as possible.

Okay, thank you very much. We've got limited time left, so we'll have to be brief with questions and answers. Joel.

Thank you, Chair, and thank you, Minister, for attending today's meeting. It was just two quick questions really and they touch upon what you've already said previously really. So, if commonality of approach is the Welsh Government's objective in this area, could a Senedd Bill be used to amend England-and-Wales legislation to achieve or retain this? If not, why couldn't it?

So, yes, the answer is, 'yes, it could', but, if we analyse where we are, I know there's a broad constitutional principle at play here, Chair, which we're talking about in generalities, but there are the specifics of this Bill as well, and I do understand that they interplay with each other. But if we accept that Dame Hackitt's criticisms apply equally to the current Welsh building control industry, there are clear benefits, particularly for an industry that operates across borders, with common approaches—so, for example, placing dutyholder requirements with key players on the current construction and design management regulations, or the CDM regulations. I'm sure that members of the committee will have heard of that. That's something the industry well understands. But also, we may have different needs from England, and that's the single regulator thing, because, in Wales, we have a much better relationship with our local authorities than they do in England—a much closer relationship with them. And so, we don't see the need for a new building safety regulator. So, there are some differences, even in using the UK Act, just to be clear.

The sole driver here for this is timing. We think that there's an imperative to get this system in place in Wales at the same time as England—certainly no later than England. And frankly, we cannot get our own Bill in place in time to do that. So, I think that timing is the driver here. So, we will ensure that a future Senedd Bill can amend the provisions of the UK Government Bill that we consider are within the legislative competence as they relate to Wales. We're absolutely determined to do that. This isn't intended to hamper the Senedd in any way or limit its devolved powers; this is simply a question of getting protections in place for the people of Wales as soon as we possibly can.

Thank you, Chair, and thank you for that answer, Minister. You touched upon timing at the end of it as well, and I just wanted to pick your brains a bit more about that, then. In the LCM, there is an assertion that there is no Senedd time to bring forward the provisions contained in the UK Bill. Could you just explain that assertion, then? Or have I just read the LCM wrong then?

10:00

But then also you mentioned then about that the Senedd just doesn’t have time to bring forward its own legislation. Why is that then? Is it, in a sense, that there's just too much that the Senedd’s doing? Or is it just not a big enough body to do it, if that makes sense?

I think, Chair, we're going to run out of time if I start to go into whether or not the Senedd is a big enough body to cope with the legislative load it currently has.

The legislative programme for this Senedd term is not yet finalised, and, as I explained in a number of other answers, there are a large number of competing demands, including committee and Senedd scrutiny time, as well as Government lawyer and drafting time—so, a large number of competing demands. This seems like an ideal opportunity to do something that’s necessary for the people of Wales, that doesn’t limit the devolution settlement, and gets something in place in a speedy way without restricting our ability to change it in the future, should that be necessary. So, it seems an expedient and pragmatic approach to doing something that directly benefits the people of Wales.

Thank you. Could you clarify— ? Sorry, I can't see my screen. Could you clarify how the Bill’s provisions are both bespoke and are necessary for consistency at the same time? Were the bespoke provisions drafted by Welsh drafters or UK parliamentary drafters?

So, it’s a response to very specific recommendations of the independent Hackitt report, so the one following on from Grenfell tragedy. So, there are important elements we want to introduce in Wales. I’ve already mentioned some of them: dutyholder responsibilities; gateway scrutiny stages in design and construction—so the planning application before construction, before occupation— and competence requirements for industry and regulators—so, specific competency requirements before you can be various people who inspect the thing. But it also provides Welsh Ministers with all the necessary powers to customise the model for Wales. So, we can determine what a higher risk building is, local authorities will be the regulator—so, removing the choice of private sector options for higher risk buildings—and same core legislation, which is the Building Act 1984, which this Bill amends, applies to England and Wales already, so we have already got the same core legislation. We’re also very mindful of the fact that most building control professionals work across England and Wales, and there’s merit in some similar provision being applicable in both nations, in order to make sure that we have a sufficient supply of professionals necessary to do this. The basic drafting was undertaken by the UK Government, but it has been scrutinised and—[Inaudible.]—agreed by me, following advice from both our policy and legal services officials.

Okay. Thank you. Do you have any concerns that taking forward legislation on the lifecycle of buildings in two separate pieces of legislation will have any impacts on the coherence and accessibility of that legislation?

We don’t see it as an issue, Carolyn, because they really are discrete aspects of a building's life. So, this Bill deals with the design and construction phase, and our Bill deals with the occupation phase. However, we are being very, very careful to ensure clarity at handover stage and at building completion to ensure all the right information is collated in the right format and handed over to those responsible in the occupation phase. That’s been one of the biggest problems that we’ve got in the current building safety crisis that we’ve got—who is responsible and where are the documents? Whose responsibility is it? So, we’re very clear that we'll need to do that.

In a similar way, regulations will need to be address the management of future refurbishment in what will be an occupied building and how that interfaces with the building control regime. But, again, refurbishment is a very different art—an occupied building requires to be refurbished—to building it in the first place with nobody living in it. So, we think it’s not a problem. They are very distinct phases. We’re very concerned with the occupation and refurbishment phase here in Wales, as long as the base design of the construction is right. Dame Hackitt was extremely clear about what the problems were in the system and what needed to be done to put those right.

It seems that there needs to be quite a lot of expertise in this, doesn't there—you know, making sure that the materials are correct. It does seem to be a minefield. Why weren’t the technical amendments made during the House of Commons Committee Stage included in the Bill on introduction? And do you expect any further amendments to be made on the Bill in relation to Wales?

So, the timetable for the introduction of the Bill meant that some  outstanding issues hadn't been completed before it was introduced. They were introduced at Committee Stage. Amendments relating to Wales related to expanding provisions for co-operation between bodies and the sharing of information, together with extending a power to ensure flexibility when defining a higher risk building—so, all the things that we thought were important for us to have control of here in Wales. So, I think it's very likely that we will define higher risk buildings as more buildings than are defined as higher risk in England, for example. So, I'm very keen for the Senedd to assist us in scrutinising what should be a higher risk building, and this is something this committee, I'm sure, would want to involved in. We don't envisage any further substantive amendments in relation to Wales, apart from the anticipated extension of the new homes ombudsman scheme to Wales, which the committee already knows about.

10:05

Okay. Thank you very much, Minister, and thank you very much to Anna and Francois as well for coming in to appear before committee this morning. You will be sent a transcript to check for factual accuracy in the usual way. Diolch yn fawr.

Gohiriwyd y cyfarfod rhwng 10:06 a 10:15.

The meeting adjourned between 10:06 and 10:15.

10:15
4. Ymholiad i ail gartrefi: sesiwn dystiolaeth 1 - academyddion
4. Inquiry into second homes: evidence session 1 - academics

Okay, so we reach item 4 on our agenda today, which is our inquiry into second homes, and our first evidence session with academics: Professor Nick Gallent, professor of housing and planning at the Bartlett School of Planning, Faculty of the Built Environment, University College London, and Professor Mark Tewdwr-Jones, professor of cities and regions at the Centre for Advanced Spatial Analysis, Faculty of the Built Environment at University College London. So, welcome to you both. Perhaps I might begin with an initial question or two, which are quite general, really. And first of all, the cultural and socioeconomic impact that second homes have on rural communities—how would you encapsulate those effects, in essence?

Should I go first, or Mark? 

I'll go first. Second homes are obviously a form of housing investment, and all areas incur this sort of inward movement of mobile capital. Second homes, as a form of investment, they can scaffold local house prices—they can have some positive impacts, and I think we need to recognise that. But I think a point comes when the concentration in particular areas of second homes is such that the impact that they have in scaffolding prices and bringing investment to rural communities is outweighed by the potential harm they do in terms of the displacement of people who struggle to get into the mainstream housing market. So, in those contexts, we ask ourselves whether we should be restricting the use of properties as second homes or whether we should be looking to provide non-market opportunities for those households that are potentially displaced. But I do think that, when we think about second homes, we have to understand that they are a result of people's desire to access amenity in accessible areas, but also they're part of a wider process of housing investment, which has broader impacts on local communities than simply the displacement effect. It's about understanding when they start to do harm.

Okay, thank you very much, Nick. Mark, would you want to add anything to that?

Yes, I would just add, I suppose, that I always see second homes in a wider context, partly because I'm a planner, so I'm always looking at greater relationships between an activity or type of development or the use of land and other things that are going on in a community. There's no blank canvas; all communities are built up of assets and attributes and changing circumstances. And, as planners, we try and monitor and evaluate change constantly. Nothing is put into a time capsule; change is always happening around us. So, as the fluctuations occur in any given community relating to housing, you're also trying to map what's happening in relation to other services, in relation to health, in relation to education, as well as linguistic sensitivity, of course, in some parts of Wales as well. So, for me, it's trying to understand, if you like, the wider relationships of what second homes will do to wider community attributes and wider community services, and parking the second homes in the context of not just what's happening in the housing market but, as Nick said, the provision of affordable housing where it's needed as well, because they're two sides of the same coin, but also the provision of services. So, a tipping point for me is where other essential community services are being impacted by that driver.

10:20

Okay. Well, thank you, both, very much; that's very useful. Just to add a little bit to that, in terms of inequalities in the housing market, and there are considerable inequalities, to what extent do you believe that second homes are a driver for that?

I think I'll go first. I think, second homes, as I've said already, are part of the wider pattern of housing consumption. I live here. I'm in north London at the moment and there's a lot of investment buying in north London, a lot of overseas companies who are buying up stock. And clearly, what that does is create a critical inequality between those who are able to access housing for purchase, and then enjoy the many benefits that come from that, and those that are left out because they see house prices spiralling, and therefore their personal economic situations deteriorate over time and over their lifetimes. And that economic situation is often shared by their children, because they're not able to provide them with the support to access home ownership because they didn't access it either.

I think these inequalities are really pervasive and they happen absolutely everywhere. The problem that you have in rural communities, of course, is that they find it much more difficult to respond to these pressures. It may be that an easy supply response is not possible because of a range of environmental constraints and capacities, so rural communities can be hit, I think, especially hard by these inequalities. And, of course, they're highly visible as well. Here in London, there's a certain invisibility in many areas of these inequalities, whereas if you're in a rural community and you can visibly see unoccupied homes and people just turning up during the summer months and then vacating those properties, I think the sense of injustice can be far greater—more palpable, I would say.

Certainly, since Nick and I and other colleagues undertook the study on second and holiday homes and planning for Welsh Government back in 2002, almost 20 years ago now, we've certainly seen the problem exacerbate, but also the problem of affordability get much worse as well, and the ratio between affordability or earnings and property prices just escalate to eye-watering levels. It means that many generations of younger people today, or not so younger people, are not able to access the sort of choices in housing that we had just a short time ago. So, this is something that is of deep concern in terms of the life chances and liveability aspects of what it means to be able to live in a place of your choosing. That choice is just not there for many people today, and that needs addressing.

If you look, then, to see what are the drivers of this, as Nick highlighted, there are issues to do with investment, there are issues to do with people who are definitely on the 'have' side of the equation who can decide to put their surplus income into additional housing, while other generations are simply not on the housing ladder in the first place, and that is totally inequitable. 

Okay. Thank you, both, very much; very useful introductory remarks. Now, Mabon ap Gwynfor, please.

Diolch yn fawr iawn, Gadeirydd. Diolch i'r ddau ohonoch chi, Mark a Nick, am ddod yma y bore yma; hyfryd eich gweld chi. Rwy'n ddiolchgar iawn am eich sylwadau ac mae'r papur rydych chi wedi'i gyflwyno'n ddifyr iawn. Eich sylwadau chi yn fanna, gyda llaw, dwi newydd fod yn delio efo gwaith achos, rhywun o Gricieth, y teulu'n ennill £94,000 ond yn methu prynu tŷ yn y gymuned yna. Dyna lefel y broblem efo ni, yn sicr, yng Ngwynedd.

Ond mae eich papur chi yn andros o ddiddorol. I'r person lleyg, mae'r drafodaeth gyhoeddus yma yng Nghymru yn trafod tai gwyliau, ail dai a thai haf fel termau interchangeable, sy'n medru trosglwyddo o un i'r llall heb fod yna ddiffiniad clir, ac o beth rydym ni wedi ei weld, does yna ddim diffiniad clir o beth ydy 'ail dŷ' yn cael ei ddefnyddio yn gyfreithiol felly. Fedraf i jest gychwyn trwy ofyn ichi eich barn chi am y diffiniadau yma, a sut y dylid diffinio beth ydy ail dŷ, tŷ gwyliau ac yn y blaen er mwyn ein bod ni'n medru llunio polisi o amgylch hyn?

Thank you very much, Chair. I'd like to thank both of you, Mark and Nick, for joining us this morning; it's wonderful to see you. I'm very grateful for your comments and the paper that you presented is very interesting indeed. Your comments there, I've just been dealing with some casework, someone in Criccieth and the family earns £94,000, but is unable to buy a house in the community. That's the level and scale of the problem in Gwynedd, certainly.

But your paper is extremely interesting. For the layperson, this public debate in Wales centres around holiday accommodation, second homes as interchangeable terms that can be transferred from one to the other without there being a clear definition, and from what we've seen, there is no clear definition of what a 'second home' is, in legal terms, certainly. So, can I just start by asking for your views on these definitions and how we should define what a second home is, and a holiday home and so on and so forth, so that we can draw up policy around all of this? 

10:25

Well, first of all, I completely agree that the division between these two things is quite opaque and difficult to disentangle. But I think that when we talk about second homes, we're often talking about properties that have been drawn from the mainstream stock, and those properties are not subject to any occupancy restriction. So, they were built with the intention that they should be occupied full time and, subsequently, they're occupied seasonally or for fewer days than one might expect, but by private individuals, and they're not commercially let. That's how I think, personally, about second homes.

When I think about holiday homes, obviously that then includes a whole raft of types of accommodation that are provided with the intent that they should be used for holiday periods and should not be occupied full time, and they may be subject to an occupancy restriction. But properties that are drawn from the mainstream stock, when they are offered for commercial let, for example, on platform-based lettings, I think they then move from being second homes or primary homes to becoming commercial holiday lets. So, I would say that it's an issue of whether they were built with restriction and/or whether they are now let commercially for profit, and if that happens, the owner may, of course, seek to register them for business rates.

I'd follow that and say that it's very difficult to define this in planning law, but I think it would come down to whether you're talking about a commercial aspect or non-commercial aspect. So, if someone wishes to rent out a property as a holiday let, or an Airbnb-style property these days, I think it's much easier to identify and define that as being quite distinctive from another type of property, a second home, which is usually for personal enjoyment and amenity value of an owner elsewhere. They might be in the same village, but certainly they wouldn't regard that as their primary home, and they would not do that necessarily for commercial benefit, but they would do it for the private enjoyment of the dwelling-house, as I think some planning law phraseology could be used here. I think, therefore, planning has always faced this problem of how to regulate that aspect of it, because planning is about the use and the development of land, and that means, essentially, usually new build and new development or new conversions. It is very difficult for planning to interfere in the existing development sector where there's no material change. Something like the second home is not a material change, at least in planning law terms.

I think, 20 years ago, we considered whether there should be a separate use class, for example, for that distinction, and we advised against it at the time because the same problem remains today, that it's very difficult to define it in planning law, and indeed to police and enforce that. But, with the proliferation of holiday homes and certainly Airbnb short-term lets, I think they are easier to define in planning law; I'm not saying it's easy, but it's slightly easier to define in planning terms, and it's also maybe easier to enforce. So, maybe it's time that the definition of short-term holiday lets is embraced within the planning system and that will be the start of, if you like, the beginnings of a definition and pulling apart of the phraseology.

10:30

Diolch yn fawr iawn. Roeddech chi'n sôn ynghynt, ac yn eich papur chi rydych chi wedi sôn, am y tipping point yma. Os oes yna proliferation, os oes yna gynnydd sylweddol yn y nifer o ail dai, er enghraifft, mewn unrhyw un gymuned, yna mae yna tipping point ac mae yna effaith yn mynd i fod, felly, yn gymunedol, ar wasanaethau ac yn y blaen. Ac ydy'r un yn wir, felly, pan fydd e'n dod i dai gwyliau tymor byr—yr un effaith, fuasech chi'n dweud? Oherwydd, wrth gwrs, mae yna impact economaidd yn mynd i fod efo'r rheini, ond os ydy'r tai yna a'r adeiladau yna yn cael eu tynnu allan o'r stoc dai leol a bod pwy bynnag sydd wedi'u prynu nhw yn eu prynu nhw am bris mawr, onid felly bod yr un impact, yr un effaith, gan dai gwyliau tymor byr a beth sydd gan ail dai? Beth ydy eich barn chi am hynny, felly?

Thank you very much. You mentioned earlier, and you cover this in your paper, this tipping point. If there is a proliferation or an increase in the number of second homes in any one community, there is a tipping point and there will be an impact on the community and on services and so on. Is the same true, then, when it comes to short-term holiday lets? Would it have the same impact? Because, of course, there will be an economic impact to those, but if those homes and those premises are taken out of the local housing stock and whoever's purchased them has bought them at an inflated price, then doesn't that have the same impact as second homes would have? What's your view on that?

Yes. If properties are being taken out of the mainstream housing stock for the purpose of short-term letting, it may well be that an existing owner, maybe a local owner, is doing that, or it may be that somebody is investing in these areas from outside with the intention of capitalising on the staycation phenomenon that we're seeing at the moment across various parts of the UK. So, I think in those instances, there are a number of impacts that we might identify. We might be able to detect a movement in house prices, and that movement in house prices may bring some benefit to existing home owners, because they're the people who are in a position to benefit. It's going to bring a disbenefit, of course, to people who are locked out of the housing market, and it can mean that they're further locked out than they were before. The level of spending that you might get through staycation visitors is something you need to look at, but then again, there's the level of disruption that you might face from neighbourhood effects, from properties that were previously housing local people, who were there 24/7, and living there and living their lives there, to people who are coming and going, and there's a constant throughflow of disruption from that activity.

So, what I would say is there are the same impacts as you would face with second homes, potentially, on the market, and on the lockout of people from the market, but there are also additional considerations around short-term letting and the disruptive effect in communities. I'm just thinking about London for now: I know that there are huge, huge amounts of Airbnb rentals affecting flats across many parts of central London. Many of them—you may not have this problem in Wales—many of them are actually in ex-local-authority properties. The leases on those ex-local-authority properties require that every new occupant sign a deed of covenant confirming that they will abide by the terms of the lease. Nobody ever does, because you couldn't turn around those deeds of covenant fast enough, and of course, it would be an added substantial cost to the owner, or to the leaseholder. So, I suspect that a vast majority of Airbnb lettings in London are in fact illegal and in breach of the lease. But none of them are enforced. So, there is a huge enforcement problem in relation to Airbnb. It is not easy; even though it's visible and we can track the geography of those lettings through the internet, it's still very difficult and costly to enforce against them.

I mean, any sort of planning intervention is going to create winners and losers, and that's why it's not done lightly. I think I would advocate a use classes change for short-term lets for the exact reason that Nick suggested—that's it's about regulating an unregulated market at the moment. So, there are wider benefits of regulating those short-term lets, relating to safety, relating to licence and a whole range of issues that go beyond planning and affordability. And, you know, they've been successful, parts of the gig economy have been successful because they're not regulated, but now we know there are downsides of having a non-regulation in that market, and when you combine that with the location of some of these in certain areas, where you can evidence a demonstrable impact is existing because of the proliferation of second and holiday homes, or the diminution of local services or the lack of affordable housing, that combination of circumstances, I think, would warrant the application of a regulatory approach to that style of home.

10:35

Diolch yn fawr iawn. Diolch, Gadeirydd. Gwnaf ddod nôl maes o law, gobeithio.

Thank you very much. Thank you, Chair. I will come back in later, hopefully.

Can you just unmute, Chair? I believe I've got a few bits to add. Is that okay?

Lovely, thank you very much. Thanks, Mark and Nick, for your time this morning with the committee, it's really appreciated. And thank you for the report that you provided ahead of this meeting as well. I found that a really helpful read. I just want to move on to some of the policy thinking now as well, and perhaps consider where that best sits in terms of policy development and perhaps policy enforcement. Because one of the things that you've acknowledged in your report—and it comes through Dr Brooks's report—is the acute nature of some of this challenge, and the classic example given in Gwynedd, which Mabon referred to earlier, is that you have Abersoch, which has around 40 per cent of housing either in second homes or in holiday homes, in the same county as Caernarfon, which has about 0.5 per cent in that sort of category. So, with that example in mind, I'm just interested to hear your thinking as to where you think policy creation and enforcement best sit—at a national level, a regional level or perhaps a very local level. Your thoughts on that would be appreciated.

I think that we mentioned in the paper that there are obviously measures that can be taken nationally through the tax system. There's a 3 per cent surcharge on second homes in England, I think that's the same in Wales. I would imagine that we probably need a little bit more research on the impact of that surcharge, and also I think on the impact of additional charges attached to council tax. My thinking on that issue is that, at this point in time, with inflation running so high and with savings rates running so low, and I don't think there's the prospect of significant change going forward, those national measures, if you like, may well be having quite limited impact on the appetite to purchase second homes in rural areas. Once you've factored in inflation and your returns on holding money in banks, it just makes so make sense to go out and buy additional housing, even if you factor in the costs of holding that housing. So, I'm strongly in favour of a national approach, because I think the causes of the problems we have with housing consumption, and the inequalities that they produce, are to do with the pattern of consumption of housing versus the advantages of holding other assets. So, I think tax instruments are really very important in this debate, but at the current point in time, we have to think about how effective they are to actually alter, in a positive way, patterns of consumption.

So that leaves us, I suppose, with local interventions, and I do think we need to be very careful about those, but they also need to be evidence based. There's a possibility of using occupancy restriction to ensure that new builds go to local people or full-time occupants. I think there's a challenge there around the sort of housing that second-home owners are actually looking for, and whether or not those restrictions on new-build occupancy will affect the level of development activity and interest amongst private operators, and possibly inflate house prices overall in the longer term. There is research in that area. There are a lot of experiments going on in England and I think we should review the experience of those in the next few years to see what sorts of impacts that they're producing.

Of course, I completely agree with Mark that if we're going to focus on the most negative aspects of holiday and second home buying, we should really start thinking about the transfer of mainstream stock to commercial letting through platforms like Airbnb, the licensing of that, and potentially also the restriction of changes of use to commercial letting. I just feel that that's probably the most practicable step that we could take. If we go the whole hog and start thinking about restricting the change of use from primary home to general second home use, which is really only about the pattern of private use of that property, that, I think, throws up quite significant enforcement difficulties.

But also, we would be required, I think, if we were to do that, to look very carefully—much more carefully than we have done to date—at the overall impacts of consumption buying on housing markets and local economies and job creation, and the benefits accrued to existing home owners versus the problems of reaching a tipping point. Clearly, Abersoch has reached that tipping point, and the epidemic nature of second home consumption across Wales means that many other areas have reached that tipping point as well. But I think to understand the balance of benefit and harm means that we could take pre-emptive action in other communities that are creeping up in terms of the concentration of second homes, and which may creep up because of the pandemic and because of Brexit, and the tendency to reshore second home investment portfolios here in the UK because of the difficulties of spending long periods in Europe, or the visa restrictions. 

10:40

I can add just a quick few sentences. On policy, I would say you have to differentiate between the financial tools, the housing policy and the planning policy. Nick has covered the financial aspect, which, of course, is feasible to do, but it might take some time just to see any results. I think, for me, it's about balancing the reactive regulatory measures—the stick measures—with more proactive carrot measures, more positive measures.

I note that the Government of Wales has introduced 'Future Wales' and 'Planning Policy Wales' earlier this year. There's a commitment, if you like, to think about the Well-being of Future Generations (Wales) Act 2015 and how that relates to planning, and that legislative and policy context at a national level provides a very, very different framework to allow regional responses, ultimately through strategic development plans when they come about, and local planning authorities to respond on the place aspects of individual places and their needs and their opportunities.

So, now that those enabling mechanisms at a national level are there, certainly on planning, I would now encourage local planning authorities to take a much more proactive line in gathering the evidence base of local change across all aspects of things that are affecting individual communities, and use that to talk about how places are thriving. And if they are not thriving on all the indicators that the national policy has provided, then I think local planning authorities can make some robust decisions, through their local mechanisms, addressing that community resilience, or rather the lack of it. That requires the local planning authorities to step up perhaps more than they have to date, and that's not a criticism, because I think we're still in a new territory of that revised policy regime, but I think that policy regime wasn't there, 10 or even 20 years ago, and it now is.

Outside of planning on housing, as we remarked in the report, I think we also need to find proactive ways to look at the flip side of the coin, namely affordable housing, and the Government to facilitate affordable non-market housing options through a variety of measures, and that will be through enabling policy, but it might be also through selective grants as well.

10:45

Thanks, Mark, and thanks, Nick, for those responses. I think, breaking down those three areas at the end there, Mark, was helpful for us as well.

Just coming back to a comment I think you made earlier, Mark, in terms of people being able to access a place of their choosing, I was just wondering what you may think is a reasonable expectation as to the level of that place of choosing to be. So, is that talking about a place of choosing being a county to live in? Is it a town? Or should even a place of choosing be down to the level of a street? This comes back to that acute nature of some of the challenges we're seeing. Perhaps even from one village to the next village, you can see quite a substantial difference in property prices, as an example. Is it reasonable to expect that place of choosing should be that exact village and that exact street that I want to live on?

I think this is obviously a very difficult area. There are areas of the country that I would love to live in, but that's not an option for a mere academic on an academic salary. So, you temper it with what you can afford, and for some people those choices are fairly limited. I think if you have close family ties and you have responsibilities to those families of a caring nature, that is a critical area. If you have local employment that requires you to be in a certain geographical location, or at least in close proximity to it, that is an issue. If you can access employment through sustainable transport options, now because of our concern about net zero, that is an issue if it doesn't require you driving a large distance across the country as well. So, these other concerns about social responsibility, about transport, about employment, suddenly need to be factored into the equation, and that, if you like, will give an indication of the feasibility of where people are able to live, not just on the affordability side, but actually on those range of circumstances that make you in an appropriate place to live your life, but also access employment and good employment options as well.

I would just add—. I mean, I think when we're talking about rural communities, it's a particularly emotive subject. There is the issue of scale. We've got relatively small villages, where people's family may be concentrated. The open market for housing means that these areas may be popular with investors, and one of the reasons that they're popular is the planning constraint that is often imposed on small, rural settlements, for reasons of amenity, reasons of character. Those pressures are particularly acute in southern England. For people in London, moving a few streets away, moving maybe to the other side of the borough, maybe moving to the adjacent borough, may not be a critical problem, given the various transport links that are available to them, and just the familiarity with this sort of pattern of mobility. But when you're talking about villages that are relatively isolated, what's happened over many, many years is that the rural planning orthodoxy has restricted their growth, and combined with these free market processes you get properties picked off by investors and therefore people locked out. I think, in those situations, we have to have an approach that identifies the real needs of people to live in particular places. I don't think we can talk about an absolute right to live in a particular place. We need to be concerned with need. We need to be concerned with the mechanisms that we find to enable the people who need to live in communities to do so, and that's often about giving support to things like community land trusts or registered providers, or using the exceptions mechanism more freely than maybe we have done up to this point.

10:50

Sorry, Chair, I'll just come back really quickly on one last point.

And it may be drifting into someone else's area—sorry, Carolyn—but is the rural planning orthodoxy wrong, then?

I think it's less wrong in Wales than it is in England.

Looking at the policies that you've developed and looking at the One Planet policy from a few years ago, I know that's very specific and it engages with a very particular lifestyle, but, just the possibility that you might think about life in rural communities and life in rural areas for people to live as they wish, I think, is very progressive. Whereas, here in southern England, the concern in rural communities is just really to protect the amenity of existing property owners, in my view. So, I think we need to challenge that and I think we need to create as many opportunities as possible for communities, through land trust mechanisms or in partnership with registered providers, to meet their own needs in situ. You know, a bit more Ireland, a bit less England.

I agree. I think I'm very positive about the Welsh context, more than I am about the English context, which is going terribly in the wrong direction to address these sorts of issues. The fact that you have national policy considerations such as vibrant culture and the language and cohesive communities as legitimised planning considerations under placemaking, through the provision of 'Planning Policy Wales' and the 2015 Act, means that suddenly those issues can be factored into the equation about how you manage rural change and the provision of housing, more so than it's possible to do in rural and coastal areas of England.

I think what's missing is, if you like, which local authorities are going to become the early adopters of utilising that framework in a robust and proactive way, and maybe what's missing for me at the moment is not more national policy, there's a sufficient amount of national policy on most of these considerations, it's actually almost a guide for local planning authorities to know how and when and in which circumstances to utilise those other aspects related to community and thriving places and factor them into planning policy and decision making at the local level. So, the framework is there, the appetite is there, but the action stemming from it we're yet to see in a meaningful way.

Thank you, Chair, and thank you Nick and Mark for attending today's committee meeting. I just wanted to touch—I just wanted to pick your brains, not touch your brains, I'm afraid, sorry—pick your brains about the comments you've made about taxation and how—I'll make a note of what I've said—the use of tax can change patterns of consumption. That's one of the things I wanted to talk to you about, because at the last evidence session we had Dr Simon Brooks talk about his paper and in that he touches upon that and the various ways to look at using the levers that councils have already in Wales to not manipulate the market as such, but try to regulate it a bit.

I just wanted to see what your views were about that, because one of the things I'm interested in is, obviously, councils are increasing council tax on second homes, and I just wanted to see how you viewed that. Is that as a way to disincentivise people from buying second homes, because the council tax is so high on them? Is it being used maybe to punish second home owners for daring to buy a home in that council area? But also, has much been done on—. Is there a level where the second home market would just react then and say, 'Do you know what? It's just not cost effective for me to have this second home anymore', and then they would just sell it then? And the irony then is, obviously, these second homes, if there isn't a market for second homes, become back within the market of local residents, but the council then, I assume, would take a hit in council tax revenue because the premiums that they can charge for second homes come back down into the normal realm. So, I just wanted your views on that, really. Sorry if I've not necessarily articulated that quite clearly. 

10:55

House prices are set at a level that reflects the pattern of consumption in a particular area. So, one would expect any change in the patterns of consumption to affect house prices in the long term, which may cause a range of outcomes in terms of people's confidence to spend, to invest, and that can have a knock-on effect for local jobs and the broader economy. That's the broader issue I think that we make in the paper. 

With regard to council tax, council tax is a charge for local services, sort of. The name implies that, although the level charged per property is based on rateable value or the value of that property assessed 30 years ago. That's a little bit of an oddity for me because the value of the property doesn't necessarily equate with the level of services used by the occupants. So, what council tax is is it's a hybrid sort of property tax, plus local service charge. When you start to apply premiums to council tax, you're adding in, I think, a third dimension, which is an impact charge. So, I personally think that it would be beneficial to make it clear that council tax can be for services used or impact caused. And that goes back to local evidence to show that this pattern of consumption by second home owners is having a detrimental impact on rural communities, which are being costed within this council tax, perhaps renamed, or perhaps with an element bolted on which is more of an impact charge. 

Now, the problem is, as I see it, that we're in a situation at the moment with house prices and interest rates and inflation, which means, 'How much is too much over the long term?' You leave your savings in a bank and, in real terms, it's declining in value. And if you do get any interest, you're paying tax on it above £2,000 per annum. With property, then that property, you'd expect it to rise, maybe 5 or 6 per cent typically over the next 10 years. There are a number of reliefs that you'll get once you go to pay capital gains tax, and you can recover local council tax through commercial letting or business rates through commercial letting. It's just a very good proposition. 

So, I would personally like to see much more research on the way in which these tax interventions affect the pattern of housing consumption in rural areas. I think—. I'm a researcher, so I would like to see much more research on lots of things, but that's one of them, along with where this tipping point happens. And I do think that my own thinking on second homes has evolved over the last 30 years of working on the topic. And, I think, when we used to think about benefits, we were very much focused on local spending by second home owners, and, obviously, the comeback on that was always, 'But they're never there.' Is that true? What is the pattern of use of second homes?

But, anyway, beyond that, I think that the broader impact of second homes is on house prices, for good or bad. 

Joel and John, I am going to add to Nick's campaign for more academic research, so I'll leave it there. 

11:00

No worries. Well, just a follow-up question if I can then. Obviously, for example, one of the arguments for advocating a tourism tax is that the extra money then is spent on the tourism industry or dealing with the impact of extra tourists in the area. So, are you saying that, with the council tax then on second homes, that that extra money is just going into the overall pot that councils have, rather than actually being spent on addressing the impact then of second homes, in a sense?

No, I wasn't commenting on how local authorities choose to spend their money. I was simply talking about the structure of the tax and the presentation of the tax. I do think it's important to show—. Any additional council tax is not a tourist tax—it's completely different. If you choose to apply a tourist tax to overnight visitor stays in particular areas, that's a completely different issue. And that's a calculation that you make about the impact that would have on tourist revenue versus the additional revenue to provide the infrastructure that tourists need, and whether providing that infrastructure would bring a circularity and bring in more tourism investment. That's a much broader issue. But I think, if we're going to become punitive and cost things, maybe the focus should be short-term commercial letting. Because there's an impact there, not only on local communities, but on professionalised accommodation providers. How often do you hear somebody say, 'Oh, let's not bother going to a guest house—much cheaper to get an Airbnb'? And what impact does that have on established operators? But these are much broader issues that we might want to look at if we're thinking about a particular set of policies to deal with platform-based short lettings.

It's been really good having the report, and for you to talk us through it as well—it's really brought it to life, thank you. I'm going to talk about planning again, going back to planning control. So, when we've talked to witnesses, it's often suggested that planning could have a policy such as when houses change into houses in multiple occupation—owners should have to apply for planning permission to change them into homes for short-term let or even second homes as well, and your view on that. And also, whether or not we've got—. I know planning enforcement sometimes struggles as well, because of resources, at local authority level. I think you have actually talked about how this could be an issue, but just a little bit more on that as well, really. And then, also, I'm a councillor, and in the area where I'm a councillor, there have been new council houses built, and we've had new estates built as well; some have had to be given over as social housing, and there's been a local lettings policy on that—we call it an onion ring, based on, first of all, family ties and then work, if you need to work in the local area. And that seems to have worked really well. So, just your views on that as well.

So, working backwards, I think the need for a lettings policy that targets your greatest need is a very sensible thing. And I think that some schemes, particularly community-led schemes, can be controversial, in that they have a certain degree of freedom to set their own lettings policies, but of course, the local authority will hold a common register and will take a view on the allocations that should be made to new social housing. And I think it's very important that local authorities have a co-ordinated approach to that, so that there is transparency in the lettings process and that there is broad agreement on targeting the greatest sources of need. Going back to change of use, you mentioned the requirement for planning permission to move to housing in multiple occupation. Well, clearly, where you're converting properties to multiple occupation—to bedsits—there is a clear planning impact: it can create additional traffic; you've got additional people; you've got an additional need for services. So, I think there is a certain sense—there's a clear sense—in doing that.

Where you've got conversion to a commercial let and perhaps accompanied by the fact that the owner is going to cease paying council tax and start paying business rates on those commercial lettings, there is also, I think, a case for the use of planning control, because it's now a commercial activity, for one thing. But also there's the potential for neighbour effects through the constant toing and froing of people entering and leaving a property; the management company's there—just generally, it's a different thing; it's no longer a home in private use. 

But where the problem arises, I think—. I mean, that can in itself generate some enforcement issues, but I think manageable ones, because of the accompanying licensing. We know that those properties are under commercial letting, and everything's very clear and transparent. Where, however, somebody, through a private transaction, decides to buy a property and the pattern of use of that property is not permanent—they're not there all the time and they're coming and going over weekends, over the summer—I think that's very difficult to police through planning mechanisms, and I think it presents a particular enforcement challenge.

And it may be the case as well that, for example, somebody who's lived in a community for a number of years moves away for a while—they move away for a while to work overseas for two years, two or three years. In that situation, they're leaving their property empty. Do they need planning permission to do that? Or they're going to live in England—they're going to live in London and they're going to retain their Welsh property as a second home. We have a neighbour two doors away who's done that. Do they now have to apply for planning permission for their home in Wales to make sure that they're allowed to have it as a second home? Their pattern of use is to drive to Pembrokeshire every weekend and enjoy it, but that would suddenly be subject to planning restriction and a need for a local authority to check that they're complying by the condition now attached to the occupancy of that property. So, I think that's a complex thing.

11:05

I'll just add a couple of points, if I may, on, first of all, planning enforcement. The expectation of planning to respond to queries of an enforcement nature is an aspect of planning that's increasing. In other words, people are asking for more enforcement, or at least to check on more enforcement, at a time when many services are just not there at the level required to perform adequate functions. So, even before we start to consider a greater use of enforcement tools for the purpose of checking second home or holiday let properties, the existing planning enforcement service is not adequate to do the job that's expected, and that needs to have a significant amount of investment in generally. And if there's additional work that's required of a housing nature, stemming from any change in policy, then even greater investment is required in enforcement. Often, these are very small teams, as I'm sure you're aware, in individual local authorities—one or two people at the most. So, the idea that you have an entire county-sized authority being policed, essentially, on planning terms, by one or two people, given the scale of change that goes on, is unrealistic, in terms of where we might go in the future.

The second issue, on more proactive measures, such as council house building—and many local authorities across England and Wales are starting that council house programme again; we have colleagues in UCL who’ve undertaken research on this very recently, showing high levels of authorities now are embarking on this to address social and affordable housing. But there are other things to look at, like community land trusts and community interest companies, and I know of examples. I've been involved with an example of a community interest company being set up for a housing purpose for specifically older people in the community, retaining, if you like, that property in perpetuity so that it's not sold off in market housing. So, there are other mechanisms that could be used in a more proactive way, including, if you like, the option available to produce place plans under 'Planning Policy Wales', of where communities start to be more proactive and are supported if they want to develop housing options of their own.

11:10

Can I—? Thank you. So, I'm gathering there will be a cost implication and resource implication on enforcement. I'm just—. Today, we’re talking about an accumulation of things, such as building control as well for cladding. Previously, there was SUDs drainage, so I'm glad to have captured that. Also, regarding registers as well—. So, it’s been suggested that local authorities could keep registers of how many different types of houses there are, whether they are to be let or classed as second homes—just to have that picture of placemaking and availability in the area. So, do you think that that’s a good idea?

Well, I think it goes back to the local evidence base. To have a good picture of the availability of housing in the area, of different types and at different costs, it provides local authorities with a way to understand the current pinchpoints and maybe understand how vulnerable the market is to, for example, second-home buying or the extraction of properties for commercial letting. That's about—. Gathering that evidence, I think, is probably the first stage towards understanding the tipping point that I think we’ve talked about previously. So, yes, I think it’s a very good idea for local authorities to have as much evidence as possible to understand the housing market and to understand threats, potential threats, to accessibility and affordability going forward.

We already know—. The Welsh Government knows, if you like, the expected housing-need trend over the next 20 years—that’s set out in 'Planning Policy Wales' to 2039. It’s about 110,000, I think. It works out at about 7,500 housing units per year across the whole of Wales. We also know the breakdown between market housing and affordable social housing in that figure. And we know the areas that have been identified as growth sites across Wales as well. So, we have very good information, in terms of trends and projections, at a national level. What’s difficult to do is to monitor it, very speedily, at the local level, because, as we know, at the local level, circumstances happen where changes occur—there’s a greater demand, there’s a lesser demand—and these are, if you like, down to, sometimes, economic and maybe, going forward, environmental factors, which will determine why a place becomes more popular suddenly than others, or the reverse of that.

I think the problem we have—. Although I’m happy that Wales has the planning system it has, notwithstanding my comments about resources, I think a more general problem that we see with planning, whether it’s in the other nations of the UK or even overseas, is the ability for planning to be agile and respond quickly to changing circumstances. And if you require a system that is one that bases its decisions, or the committee bases their decisions, on up-to-date intelligence and data about changing circumstances in any given locality, that is a continual process, a continual cycle, that even development plans written every five to 10 years simply isn't capturing.

So, the issue that I've been working with in another part of my job on digital planning is to what extent can we make local plans much more agile and responsive to different conditions. Now, I don't mean market conditions per se—it could mean climate change conditions, it could mean social change conditions—but how do we collate the intelligence and data and make it visible and meaningful, almost by the second, because these tools are now available to us, and bring those sorts of techniques into our local planning and policy processes, so that we'll be able to have the right intelligence and the most up-to-date information to make our planning decisions relevant and meaningful for the circumstances that we have. That, combined with the uniqueness of the data and intelligence in individual places—maybe even different communities just a few miles apart are going to have different circumstances—needs to be factored into making the decision. Then we'll have a planning system that suddenly becomes much more responsive to change and that people will have greater confidence in, because, at the moment, I think people don't have confidence in the planning system, despite the frameworks being in place, to be able to respond speedily enough on the issues that require authorities to be seen to be addressing. 

11:15

Okay. Thank you, both, very much. Thank you, Carolyn. We'll have to move on, I'm afraid; we're already over time for this item.

We've strayed into gaps in data and knowledge territory, which I know Alun Davies wanted to address. Alun.

Yes, and really following on from Mark's final statement. Nick invited us earlier in the conversation to discuss the work that he might be doing as a researcher in terms of additional areas that perhaps we should be looking at. And you've both, in referring to different policy areas, referred to data, to information and to the research available to us, and I was wondering—and I'll try to wrap this into a single question for time reasons—first of all, where are those gaps. Mark, you said you're a researcher—sorry, Nick, you said you're a researcher, you enjoy doing this. So, if you were to give us a list of one to three or one to five priorities, what would that contain? And do we have any examples—some off-the-peg examples—of elsewhere in the United Kingdom, or elsewhere in the world, where we might be looking for a level of knowledge, inspiration and experience on these matters?

I'll be very brief. I have talked about understanding the broader market impacts of second homes, for good or bad. There is a lot of research that's being done on this across Europe. There's a Professor at the London School of Economics, Professor Christian Hilber, who's been working on the impact of second-home buying on the Swiss housing market and Swiss rural communes, and who's argued quite strongly that those price changes brought about by second-home investments are very positive for local economies.

I think we need better intelligence—No. 1, better intelligence—on how second homes impact rural places and rural economies. We may feel that we know that already. We may look at extreme examples and say, 'They're bad', but we may need a model for looking at everywhere to determine whether they're confronting a difficult situation [correction: compounding a difficult situation], or whether second homes are supporting positively the local economy, the local housing market, local jobs and so on. But also, I think we need to understand second-home buying relative to other forms of housing consumption. The pandemic that we've faced over the last couple of years has, I think, changed the pattern of housing consumption in some parts of Wales. We have a small project at the moment looking at Brecon. We're driving up there next week to meet some of the national park officers. We're looking at not the movement in of second home owners or the conversion of properties to short-term letting; we're looking at people's permanent movements to rural communities, particularly on the edge of Wales. I think we need lots of intelligence about the place of second homes within this broader pattern of market change. Once we have that, we can construct good policies that are pre-emptive, proactive, and that deal with potential problems before they arise—a policy that is coherent but also able to reflect the nuance of different local situations.

I'm always going to argue for a little bit more research, but I think that that's the foundation of well-thought-out policies. There's some research you don't need to do. I don't think you need to do anything on the impacts of occupancy restrictions on development activity, because I think there are so many local experiments with that in England that you can just sit back and wait to see what happens there and wait to see if these policies deliver a positive benefit. I think obviously, also, there is a wider possibility to learn from international experiences, and certainly what's happening in Switzerland is one example. Anyway, that's it. 

11:20

I'll be very quick, John and Alun, in response to this issue. Looking at housing in relation to other matters, other considerations, which is I know the point I've been making throughout the evidence, I think one area that I would like the Welsh Government to consider is digital planning. Certainly, that's been rolled out very speedily in England. It's already adopted in Scotland, they have a digital plan at the national level, and the Department for Infrastructure in Northern Ireland is now considering digital planning as well. I haven't heard much from the Welsh Government about how it's considering digital planning. And research is something that, actually, planners also undertake in local government—it's not just us in our ivory towers that do this—but they need place intelligence research to make robust decisions. So, the research cuts, if you like, across all needs.

If you think about how we understand how places change, the tools that we use today in planning are a little bit archaic. The idea of the planners behind closed doors doing an assessment of all sorts of change, about traffic, about employment, travel to work, biodiversity issues, air quality, and then they gather and sift that intelligence and then, lo and behold, some years down the line they'll produce a draft plan on the back of it that is then going through public consultation, that is then adopted—ah, so the world has changed over those four or five years. So, we're using twentieth-century techniques to provide intelligence on twenty-first century problems. That cannot cut it any longer. Data and digital is here today. We all use it. What's missing is how it's integrated into the planning system.

The fact that I can pick up my phone and get access to data about air quality in my neighbourhood, about traffic levels by the second, about all sorts of live data—we use it on a day-to-day basis, but at the moment, it's not a requirement to use this data in a visible and meaningful way to justify local planning. That's the missing element that requires a great deal of resources. That's not easy, but also it's not easy because of the skills requirement that's then needed for professional planners and others to be able to deliver and manage that sort of service. But that live, up-to-date information about how places change, how they are much more complex than single land uses, is where I think we are going to have to respond, going forward. 

Okay. Thank you both and thank you, Alun. Thank you very much to both of you. You will be sent, Mark and Nick, a transcript to check for factual accuracy in the usual way. Thank you very much for giving evidence to committee today and for your paper. Diolch yn fawr.

5. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o weddill y cyfarfod
5. Motion under Standing Order 17.42 to resolve to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).

Motion:

that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

The next item before the committee today is item 5, a motion to agree to exclude the public from the remainder of this meeting. Is committee content so to do?

11:25

Okay, thank you very much. We will, then, move into private session. And before we do that, we will have a short break until 11:40. 

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 11:25.

Motion agreed.

The public part of the meeting ended at 11:25.