Agenda item

Report from the Strategic Director of Regeneration and Environment.

Recommendations:

That Cabinet:

1.          Review all options proposed in section 5 of the report and approve Option 3, which is to proceed to approve Selective Licensing declarations, including the establishment of a stakeholder steering group (based on the criteria set out within the report and appendices);

2.          Approve the revised Licence Fee and the Licence Conditions, in all of the proposed areas which are:

a)    Town centre / Eastwood / East Dene / Clifton / Boston Castle 

b)    Masbrough / Kimberworth

c)    Thurcroft

d)    Dinnington

e)    Brinsworth

f)      Parkgate

Consideration was given to the report which asked Cabinet to determine whether or not to introduce further Selective Licensing declarations following the conclusion of the previous Scheme in April 2025. It was proposed that the revised Fee and Licence Conditions for the following areas be approved: Town Centre/Eastwood/ East Dene/ Clifton/ Boston Castle, Masbrough/ Kimberworth, Thurcroft, Dinnington, Brinsworth, and Parkgate.

Selective Licensing was a tool that sought to significantly improve living conditions for residents in the private rented sector by enforcing minimum property standards and holding landlords accountable. Government reviews, including the Ministry of Housing’s 2019 evaluation, found that such schemes helped tackle poor housing quality, anti-social behaviour, and deprivation when implemented strategically. Independent research by the London School of Hygiene and Tropical Medicine also linked licensing to reductions in mental health issues and improved housing management. Locally, schemes like Rotherham’s had removed thousands of serious hazards from homes, contributing to better health outcomes and improving communities.

The Council had previously designated 2 Selective Licensing schemes (2015-2020 and 2020-2025) which were declared on the criteria of ‘low demand’ and ‘high levels of deprivation’ respectively. Areas of Eastwood, Ferham, Masbrough, Maltby, Parkgate, Thurcroft and Dinnington (6 in total) had been subject to both schemes and were under licence for 10 years. Both previous schemes had delivered significant improvements to the condition and management of private sector rented properties in the designated areas. However, the latest information available from the 2020-2025 scheme also demonstrated that landlord behaviours in the majority of cases had not changed sufficiently to achieve the desired goal.

Despite the first scheme which ran from 2015-2020, the second 2020-2025 scheme still identified and led to the removal of a further 8,176 Category 1 and 2 hazards from 1,416 homes, which delivered improved health and quality of life to Rotherham’s private sector tenants. Without the scheme being in place, and the additional resources it provided, the 2,377 inspections carried out under this scheme, would not have taken place. The health consequences of poor housing conditions were significant and the removal of this many hazards from people’s homes represented a societal financial benefit of £1,860,797 (BRE Housing Health Costs Calculator). Paragraphs 1.9 to 1.13 detailed further hazards and the work undertaken to address those. A more detailed breakdown of the work undertaken as part of the 2020-2025 scheme could be found at Appendix 1.

It was acknowledged that Selective Licensing in itself was not a ‘silver bullet’ which allowed traditional services and policing to step back. Any declaration must deliver additional provision to an area and not seek to fund core service provision. The limitations of any declaration were explored in the ‘setting expectations (section 2)’ section of the Cabinet report of 16th September, 2024. The same report also highlighted the benefits of Selective Licensing, realised in areas like Maltby, which were centred on improving housing conditions, tackling deprivation, and enhancing community wellbeing. As a result of these improvements, Maltby had not been proposed as an area for a future designation and was therefore not included in the consultation exercise. The report highlighted that Selective Licensing made a significant contribution to ensuring landlords maintained safe and healthy homes, which directly contributed to better health outcomes.

At the September 2024 meeting, Cabinet considered a report on the possibility of future declarations of Selective Licensing. The report contained details of potential areas for consideration, along with risks and supporting data. The selection of areas for consultation was based on a comprehensive ranking of 28 Lower Super Output Areas (LSOAs) with high concentrations of Private Rented Sector (PRS) properties. These were assessed against 5 declaration criteria: low housing demand, anti-social behaviour (ASB), high migration, housing deprivation, and crime. Of these, 22 LSOAs were identified as meeting at least one mandatory criterion, making them eligible for future designation.

As a result of the information presented, Cabinet agreed to commence consultation (as required by S80(9) Housing Act 2004), with a view to developing and considering further designations which would commence after the 2020-2025 Scheme ended. 13 weeks of mandatory consultation commenced on the 6th January, 2025, and concluded on 19th March, 2025 (Phase 1), with a further period running from 30th June, to  20th July, 2025 (Phase 2) in each of the following areas:

-         Town centre / Eastwood /East Dene / Clifton / Boston Castle

-         Masbrough / Kimberworth

-         Thurcroft

-         Dinnington

-         Brinsworth

-         Parkgate

The consultation was extended to ensure the Council received a broad and representative range of feedback from all stakeholders, to gather comprehensive feedback from all affected parties and ensure everyone had the opportunity to voice their opinions and contribute to the decision-making process. Paragraph 4.0.4 of the report and Appendix 3 to the report detailed how the consultation was carried out and who was contacted. In Phase 1 the Council received a total of 541 responses, comprising 480 online/paper surveys and 61 direct emails or letters. In Phase 2 a further 581 survey responses were received; 201 of these were online and 380 were paper surveys. Of these, 368 were returned following a bulk request co-ordinated by an Elected Member and community group. These were submitted immediately after the survey closed and had been manually analysed and reported separately. An additional 15 direct emails and 198 doorstep interviews were also conducted with officers providing information and signposting residents to the survey. In total, the Council received 1,335 responses across both phases, representing an estimated 8.3–9% engagement rate from the 16,000 properties contacted. This compared favourably to the previous 2020–2025 Scheme, which received 578 responses.

In Appendix 4. the responses from all aspects of the consultation were summarised. Section 4 of the report breaks down the results of the consultation and provides an overall conclusion. The conclusion reached was that the 1,335 responses gathered over the period of Selective Licensing consultation did not support Selective Licensing or the proposed fee structure. Responses seemed to more strongly support the reasons stated for the proposed schemes and its intended outcomes, (across all areas) than Selective Licensing itself, as a mechanism for delivery. The associated costs were the main issue in dispute.

Responders were also offered a range of alternative proposals to replace or supplement Selective Licensing. They were summarised in Section 4 of the report and contained in full at Appendix 7.

As detailed in Sections 4 and 5 of the report and the appendices, the Council had acted upon the feedback received and had adjusted its proposals in terms of the focus of the proposed declarations and Neighbourhood Plans, the boundaries and the associated fees.

The proposed changes to the Licence Fees were set out in Section 5 of the report. Under Part 3 of the Housing Act 2004, Section 87 allowed the local housing authority to charge a licence fee to cover all Part 3 activities including all costs incurred by the authority in the administration, enforcement, and monitoring of a scheme. These costs might include processing applications, communication with both landlords and tenants within the scheme, conducting inspections, investigating breaches of licence conditions, and wider enforcement. The fees could also be used to cover non-recoverable costs in the use of interim and final Management Orders within the scheme boundaries. The Council could not generate surplus funds from Selective Licensing schemes. The income generated, the bulk of which was collected in years one and two, was required to manage and resource the scheme for its full period of designation. Each Selective Licensing scheme had unique objectives and fee structures including discounts. They were, therefore, not directly comparable, however, the table at Paragraph 5.12 showed Selective Licence fees declared or proposed since 2024 in England. A more complete list of scheme fees was at Appendix 9.

Paragraphs 5.18 to 5.25 described the fee changes in detail. The overall Standard Licence Fee, made up from the Part 1 and Part 2 charge would be marginally reduced to £975.00 which, in turn, increased the discount on licence charges. The Part 1 charge covered administration and it was estimated that the costs of infrastructure, including a database and administrative staff cost (x3.2 FTE), would be £1,154,287 over 5 years. Based on the reduced expected licences (4,132) costs per licence application will be £276.00. The Part 2 charge covered maintenance and was estimated from the Neighbourhood Development and Improvement Plans (Area Plan) attached at Appendix 5. The requirements from the 6 plans identified 9.65 (FTE) officers, at varying grades, to deliver the enforcement and engagement in the 6 areas. The estimated cost of the maintenance element was £2,968,163 over 5 years. The standard maintenance licence charge would be £699.00 (Budget projections were contained in Appendix 9.)

The discounts identified in the consultation would be retained or increased as follows:

•         Applicants who provided complete and valid applications, assumed to be 50% of applicants, would receive a discount of 5% from the Part 2 charge

•         Applicants who received a rebate in the 2020-25 scheme (37%)

•         Applicants with flats in the same building would pay one Part 1 charge per building and receive a 65% discount on the Part 2 charge for all subsequent properties within that building

•         Applicants with large portfolios (four or more properties) would pay a full Part 1 charge for each of their first three properties and receive a 65% discount on all subsequent properties.

Details on charges for non-compliant applications were set out in paragraph 5.21. The effects of the changes to the fees were set out in the table at paragraph 5.26.

Section 6 of the report set out the timetable for implementation. Appendix 10 was the publicity plan which outlined the prescribed actions that had to be undertaken following a declaration.

Section 3 of the report set out the options for Cabinet to consider. Option 1 was to not pursue any further Selective Licensing declarations at this time. Option 2 was to await the effect of the Renters’ Rights Bill (as discussed in paragraph 2.4 of the report) and the updated data to identify relevant LSOA’s and therefore postpone a decision on any declaration until the Bill was enacted and or new national/local data sets were published. These options were not recommended.

Option 3 was to proceed to make Selective Licensing declarations based on the criteria set out, the revised Licence Fee and the Licence Conditions, in all of the proposed areas, including the introduction of a Stakeholder Steering Group, as suggested in the consultation responses. This was the recommended option.

The report was considered by the Overview and Scrutiny Management Board (OSMB), who advised that the recommendations be supported. The Chair of OSMB thanked the Assistant Director for his comprehensive responses during the scrutiny of the proposals. Many questions had been asked on various aspects of the report but OSMB agreed to support the recommendations as proposed. They did ask that the annual review of the
Selective Licensing planned designations be brought back to the relevant scrutiny committee to review the progress being made on the overall Selective Licensing scheme and to review any amendments to the scheme 12 months after implementation. This was accepted by Cabinet.

During the meeting, Cabinet Members expressed their support for the scheme, particularly the positive impact it would have on families and children. The Leader reiterated that the Council could not make any profit from Selective Licensing. All fund generated would go into the running of the scheme. He stated that this was about making sure tenants were safe in their homes. The consultation responses were acknowledged but the Leader explained that it was a consultation, not a referendum. He criticised landlords that had openly threatened tenants with rent increases due to the scheme. The fact that Maltby had not been included in this scheme showed that Selective Licensing could lead to such improvements that it was no longer necessary. The Leader hoped that would be the case for other areas in 5 years’ time. He reiterated that he wanted landlords to work with the Council to improve properties.

Resolved:

That Cabinet:

1.      Review all options proposed in section 3 of the report and approve Option 3, which is to proceed to approve Selective Licensing declarations, including the establishment of a stakeholder steering group (based on the criteria set out within the report and appendices);

2.      Approve the revised Licence Fee and the Licence Conditions, in all of the proposed areas which are: a) Town Centre/Eastwood/East Dene/Clifton/Boston Castle b) Masbrough/Kimberworth c) Thurcroft d) Dinnington e) Brinsworth f) Parkgate.

3.      Agree that the annual review of the Selective Licensing planned designations be brought back to the relevant scrutiny committee to review the progress being made on the overall Selective Licensing scheme and to review any amendments to the scheme 12 months after implementation.