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.
Robert Jenrick, the Secretary of State for Housing, has rejected Croydon Council’s application to extend the term of its controversial landlord licensing scheme.
INSIDE CROYDON reported – 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.
They don’t seem to realise that by law the Council cannot make a profit by a Licensing Scheme, even though most do.
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.
Jenrick’s letter also stated. “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,”.
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 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.
Alison Butler, and her husband, Paul Scott, remain as Labour councillors.