CROYDON IN CRISIS: The government has binned an application to extend the borough’s landlord licensing scheme, saying that the council failed to provide any housing strategy. EXCLUSIVE By STEVEN DOWNES
Robert Jenrick, the Secretary of State for Housing, has rejected Croydon Council’s application to extend the term of its controversial landlord licensing scheme.
At a stroke, the Tory government minister who just a few weeks ago handed the bankrupt borough a record-breaking £120million bail-out has now blown a £22million new hole in Croydon’s sieve-like budget.
There are few who are surprised at Jenrick’s decision, which was a long time in coming, after the renewal application was submitted last year, shortly before the five-year term of Croydon’s original landlord licensing scheme expired. Many suspected that a Conservative government minister would do little to assist the labouring Labour council.
But few could have imagined that Jenrick, or the civil servants who drafted his letter to Croydon, would have been so devastating in their critique of Croydon’s renewal submission. A council which in recent weeks has been repeatedly criticised for its incompetence was once again told it had failed to deliver, this time from the highest echelons of government.
The landlord licensing scheme was supposed to be one of the “achievements” of the council’s Labour administration of the discredited Tony Newman, Alison Butler and Paul Scott. It was intended to improve the standards of private rented accommodation in the borough.
In 2015, it became a legal requirement of private landlords with properties in Croydon to register and pay a £750 fee per property. “As part of its drive to make Croydon a better place to rent, Croydon Council has designated the borough a private rented property licence area.
“Through the application process, the council will determine that the proposed licence-holder is a ‘fit and proper’ person to manage their properties,” the Newman and Butler-controlled council said at the time.
There were heavy penalties for not complying with the system. Landlords renting a property without a licence faced fines of up to £20,000, while those that fail to comply with licence conditions can be prosecuted and fined up to £5,000.
Yet it soon emerged that, despite generating £6million in licence fees in the first year alone, setting up the scheme and actively administering it was proving a bit difficult for Croydon.
According to the council’s own figures, in 2016-2017 the council completed 3,473 inspections of private housing. Yet for all those visits, according to a Freedom of Information response, Croydon’s inspectors did not record any information on the number of Category 1 hazards – the type which might have resulted in a prosecution – in private rental properties.
Scepticism about how the money raised by the licences was being used continued throughout the scheme’s lifespan. Ultimately, it had raised £22million, according to the council’s 2019-2020 accounts, but auditors Grant Thornton were unable to say with any certainty how that money had been spent. There were well-placed doubts that it had been spent on policing the borough’s private rented sector, as had been the original intention.
Indeed, the failures in the implementation of the original licensing scheme were among the reasons given by Jenrick for refusing to renew it. “In the council’s previous selective licensing scheme 2015-20,” the minister wrote, “the council did not demonstrate strong outcomes or efficient delivery of the scheme. This evidence further persuades me not to grant a further scheme.”
With the council under new management since its financial meltdown last autumn, its MHCLG-approved recovery plan still includes a chunky £20million-plus in landlord licence fees expected over the course of the next four years. Chris Buss, Croydon’s interim finance director, will have to come up with a way of plugging another hole in his already battered budget.
In his letter to Croydon Council, Jenrick wrote, “After careful consideration, I have concluded that the application fails to satisfy the criteria set out in S81(2) and S81(4)(b) of the 2004 [Housing] Act and Article 4 of the Selective Licensing of Houses (Additional Conditions) Order 2015.
“As such I consider that it is appropriate to refuse to confirm the designation of 28 wards as subject to selective licensing on both grounds applied for.”
And he added that the council was “unable to demonstrate how selective licensing, combined with other measures taken by them will contribute to the improvement in general housing conditions in the area”.
It’s a paragraph that hints strongly at the MHCLG telling Croydon to get their own house – or council flats – in order before inspecting private properties, thanks to the notoriety gained by Croydon as the slum landlords of Regina Road.
The real knee in the nuts to the council’s failed application came towards the end of Jenrick’s letter. “The council did not provide a copy of the housing strategy to evidence that the power to designate is consistent with the council’s overall housing strategy,” it read.
And it added, “The council did not provide an up to date comprehensive housing strategy, the overall objectives did not provide the level of detail necessary to satisfy me that making the designation will significantly assist them to achieve the objectives stated.”
Alison Knight is going to earn her 800 quid daily fee as the council’s director of housing over the next few months if she is able to turn this latest disaster around.
Jenrick advises that Croydon can re-apply for a licensing scheme, but the half-baked renewal application – prepared under the auspices of Butler – took officials the best part of a year to deliver, and staff resources at Fisher’s Folly are stretched to breaking point now.
Jenrick even rubbed Croydon’s nose in its own mess, advising on best practice over publicising such decisions. “It is not incumbent on the council to publish a notice informing its populace that an application for a selective licensing designation has not been successful.
“However, it is best practice, and I, therefore, encourage the council to take reasonable steps to publish the outcome of this application.”
The letter was dated June 7, last Monday. Yet by the end of the working week, five days later, and despite Jenrick’s kind advice, there was still no mention of this significant development on the council’s website.
Indeed, Inside Croydon understands that the Jenrick decision had only been shared with a select few councillors and only very few senior staff.
Alison Butler, and her husband, Paul Scott, remain as Labour councillors.
Read more: Council’s landlord licensing scheme can’t cope with workload
Read more: Croydon Council hits Labour Party donor with £32,000 fine
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I think Jenrick is saying that Croydon has been struck off as unfit to practice as a landlord licensing authority – evidenced by the state of its own properties.
These schemes across the country have been proven as job creation exercises that do absolutely nothing to improve conditions for renters. Instead they batter over the head already-bullied landlords who are drowning under the burden of pointless regulation. Regulation that is simply a fee-generating exercise that creates hurdles for landlords to provide decent housing to those who can’t afford to buy or actively choose to rent.
If the £22m generated was meant to plug blackholes then it patently defeats the purpose of landlord licensing schemes. The idea is that all revenues should go towards improving standards. Since this council does nothing to improve housing standards, as witnessed by it’s own stock, this judgment simply is a victory for common sense.
Remember Cllr Paul Scott smugly chastising neighbours at committee who were proposing greedy private developments looming over their back gardens? He’d say, “wind your necks in, this is all part of council’s housing strategy to deliver housing to those who need it the most..”
We all new it was bullshit at the time and the government has confirmed it now: neither Croydon Council or Paul Scott ever had a credible housing strategy.
We now see what a vacuous bag of wind Paul Scott was.
The government should have offered an alternative (and more money) if they felt the scheme wasn’t working – even if it required government oversight to ensure funds were spent well. It’s the most vulnerable who lose out again. Low income and disabled tenants who are trapped living in slum housing in these new Dickensian times. Anyone can be a landlord under current legislation. Violent criminals, fraudsters, sex offenders. Vulnerable tenants deserve and need better protection.
The victims of the depredations of private landlords would have most screaming in dismay at this latest loss in regulating landlords. However the reality is different
In Croydon a Private Landlords can do as they please. As part of the Landlord Licensing all have signed a Anti social behavior charter along with the Met Police and Croydon Council. Unfortunately the process is unfit for purpose in the way it is set up. There are never any resources to do adequate compliance within any reasonable time and little resource from the Police at all. Croydon Council have taken money to do a job and not delivered at all and the processes were not fit for purpose. They just got found out.
There is little chance this Council would be able to deliver effectively anything that any resident really needs nor can it provide any reasonable civic protection to even a cricket, let alone a human being. We live in a high crime Borough with a terrible reputation and are served by the worst administration and elected officials in living memory that seeks to do cuts and hide the detrimental impacts on residents and visitors health, both physical and mental and the quality of life for the next two decades if not longer.
Perhaps Jenrick has actually done us a favor by costing us £22m. Perhaps we may get a process that can actually reduce these factors in all areas of the rental/lease market in the future. But not with the present administrative organs that have lost all credibility and trust.
What does this mean for new prospective landlords therefore? Can anyone now become a landlord since the scheme has now failed?
Anyone could become a landlord anyway – its just that they do not have to pay Croydon Council once the current scheme times out. We can go back to complaining about landlords and anti social tenants to the compliance and enforcement departments. Ah perhaps not as they are mostly office based, uncontactable and have had their departments cut to shreds. We can send them a letter to their postbox notifying them or try an email (you will like the auto response but not helpful) but until they come out and see the issue (which by then will have ended) they can do little. But you never know its like the Lottery, someone gets lucky every week – (sadly millions do not)
If you think I am joking sadly on this I am not.
As a private landlord who had no choice but to pay this outrageous fee on each property owned, we never ever heard from the council again. No inspections or contact whatsoever although we were told this was the main purpose of the fees!
It seems to me that the Council just trousered the money and blew it all on their usual waste and trendy projects. And Certainly not on improving their own stock of housing!!!!
Some of your commentators seem to think all private landlords are villains. I would point out that, like many landlords, our properties are VERY well kept with high standards, and with immediate attention to any repair. We have happy tenants, something Croydon council could not even come close to.
No one has ever said, certainly not published on the website, Eileen, that all private landlords are “villains”. Or are you now claiming that all private landlords are angels? Nor would any reasonable person claim that all council homes are in the same state as Regina Road (they are not).
Thing is, there is clearly a need for some kind of rent control (landlords hate it, but there you go…), and regulation of private rented properties. A licensing scheme was a means of doing that.
However, we heard from very early on in the introduction of the scheme of the gap between how it was presented and what was being delivered. Instead of a team of inspectors working their way through all licensed properties with regular checks, the council took the licence fees for two years and belatedly started sending out inspectors in cases where tenants had cause to complain (that’ll be those who ever manage to get through on the council’s phone lines).
If you then fail to have anything resembling a housing strategy…
The council took the fees for 5 years, and were still processing applications after the scheme was terminated last September. They took the fees and only inspected properties that received complaints, which is their obligation under national housing law – it is not reliant on a licence scheme. Licensing schemes are a duplication of existing laws & powers to regulate the PRS.
Housing and rental standards are already enshrined in law including HHSRS, MEES, minimum EPCs, minimum space standards, Mandatory HMO licensing and regs, gas safety certificates, Electrical Installation Condition Reports, PAT testing, fire regulations including alarms, deposit protection schemes and issuance of the How to Rent Guide, among others.
I think everyone will agree that ALL homes should be fit for purpose, but Selective Licensing is not the way to ensure this.
Heather you are right to a large extent and also with the conclusion. Howver the real issue here is that not only did they take the money they rarely actually inspected properties even those complained about. They ignored neighbors and advocates calls on tenants behalf and Tenants were threatened with eviction all of which should have been dealt with. The unfortunate reality is that Croydon never resourced the need effectively and still does not. However add in that those Licenses included tenants and Landlords Anti Social Behaviors (of which there are a few – more so at the lower scale of the housing portfolio’s) And the processes required to take action are onerous and very dangerous to those reporting these matters. At the end no action gets taken even with witnesses video photograph etc. by either the Police or the Council. Therefore it is not just the scheme itself . Any scheme will fail when The Administrative and enforcement authorities fail to do anything about the issues raised.