Richard Lambert on the NLA’s Newham campaign

Richard Lambert, CEO of the National Landlords Association, tells us what the NLA has been doing about Newham Council’s licensing schemes.

Richard Lambert, CEO of the National Landlords Association, tells us what the NLA has been doing about Newham Council’s licensing schemes.

I’m conscious that there was a widespread expectation that the NLA would challenge Newham Council’s licensing schemes in the courts.  The precedent that would be set by a local authority introducing both selective and additional licensing at the same time to cover the whole borough was so far-reaching that many felt it could not be allowed to pass.  Furthermore, in our response to the consultation, the NLA had questioned whether Newham had interpreted the law correctly.

The deadline for launching a review has now passed and the schemes have been launched.  And those who expected the challenge are now asking why the dog didn’t bark?

It’s a fair question.  And the simple answer is that far from not understanding the law, the more we researched the case, we realised that Newham expected a judicial review and had constructed the scheme carefully so as to close off every avenue and minimise the prospect of a successful challenge.

A judicial review does not examine the substance of the issue, but whether the authority has acted within the powers granted to them under the law.  Once Newham announced that it was going ahead, we sought advice from Jonathan Manning, a leading housing law barrister, who has successfully challenged other licensing schemes.  His view was that while we might have a case, we were a long way from having the evidence which would mean it would stand up to argument and cross-examination in court. To succeed, we would need to demonstrate that the council had acted beyond its powers, in that, based on the evidence available, no reasonable local authority would introduce such a scheme.

Newham had published on its website a summary report of the evidence on which the decision was based.  The report mapped incidence of anti-social behaviour across the borough and related it to police action and other enforcement actions in privately-rented properties.  On the face of it, this appeared to establish a reasonable argument that there was a problem of management in the private-rented sector and that it was borough-wide.  To challenge it, we would have to demonstrate that there was evidence which had not been considered or flaws in the methodology which distorted the results.

However, we were unable to obtain the detailed evidence behind the summary.  The Council claimed that it was entitled to withhold two of the three evidence documents from a Freedom of Information request response because it thought there was a significant risk that releasing them would compromise intelligence methods used in detecting crime – and the police agreed.  Although we appealed to the Information Commissioner and Local Government Ombudsman to review whether this exemption was reasonable, we were unable to get any further.  Further FOI requests yielded limited additional information.

In the eyes of the law, if a Council can reasonably demonstrate that some element of anti-social behaviour could be related to the failure of some landlords to manage their tenancies and properties properly, then they have a justification to use the powers.  The crucial word here is “some” landlords, which for these purposes can be interpreted as “more than one”; there is no threshold in the legislation.  If it can be shown that the problems are found across the borough and cannot be reasonably shown to be confined to specific, defined areas, then the borough-wide designation could also be considered justifiable.

So we were forced towards the conclusion that, if the summary report accurately reflected the evidence, then the law would consider that using the powers was justified.  And without sight of the supporting evidence, we could not argue to the contrary.

We carefully pursued other options, but none amounted to what the lawyers describe as “an arguable case”.

I’m a great believer in picking your fights.  It looked increasingly like this was one we could not win.

There was no doubt that Newham would fight the case, all the way to the Supreme Court if necessary.  The NLA would have to match them at every stage and the cost would be staggering. In the end, the NLA Board had to decide whether it was worth betting the farm on an uncertain case which might achieve a legal precedent, but still leave the schemes in place, and our member landlords in Newham no better off.

Where does that leave us?  We still believe that Newham are mistaken in their belief that licensing will help solve the problems they face.  We recognise there are important issues to be tackled in the area, but strongly believe that the Council would have been far more effective if they had agreed to work with the NLA to form an alliance with the good, law-abiding landlords, enabling them to target their resources forcing out the rogue operators. On the other hand, this is not, as some seem to think, the green light to introduce similar schemes.  We will not accept blanket licensing by the back door, and will continue our campaign in Newham and with any other Council considering taking the same approach.

5 thoughts on “Richard Lambert on the NLA’s Newham campaign

  1. Richard, two things come to mind –

    1) Do you expect to revisit this with Newham a few years down the road and ask them to prove that the licensing “worked”? They should have evidence by then, right?

    2) Money – is it true that the 2004 Housing Act enables a council to have selective licensing, but that all fees should only cover the costs of the licensing scheme – i.e. an audit check point? I’m keen to avoid this becoming a future “tax” on landlords without control and a potential new revenue stream for councils…

    Thanks, Simon.

    1. Simon
      1) We will indeed monitor the scheme as it progresses to see whether it succeeds in the Council’s own terms, as well as the impact it has on the borough in terms of investment in the sector and demographic change.
      2) The Housing Act 2004 does allow a council to set fees so as to cover its costs in implementing a licensing scheme, as well as aspects of enforcement through interim and management orders. Once the fees are set, they apply for the full period of the scheme (in this case, five years).
      Inevitably this will produce an additional revenue stream for the council, albeit to meet a corresponding cost. If your concern is whether there is any way to verify whether the council set the fee to generate more revenue than is required to operate the scheme, I am not aware of a formal requirement for audit, but that is something we can look into.

  2. I recently had a first hand experience or Newham’s efficiency in managing the Housing records and related matters. After 2 months’ attempts, including attempts by my Solicitors, I gave up. So how is Newham going to manage the extra bureacracy they want to create. Only the poor Landlords are going to be harrassed. I have seen that even the HMO regs are not being sufficiently in Newham’s own council managed properties. Is Landlord Licensing going to improve the already poor service from Newham?
    Manu Patel

  3. Dear Manu
    There is clearly a strong commitment from the political leadership in the Council to ensure the schemes happen and are successful. Whenever we have asked Newham Council whether they will have the resources to manage, implement and enforce their licensing schemes, we have received a very confident answer that they will.

    As I said in my previous answer to Simon, I think we have to take Newham at its word, and hold the Council to account according to their plans and their own objectives. It has consistently said that licensing should not represent a burden on the law-abiding landlord, but will enable the Council the enforcing authority to tackle poor standards and criminals in the private rented sector more effectively. The onus is now on them to demonstrate that they were right.

  4. Have the NLA revisited the Newham scheme to find out the results? Southwark Council have now announced they are bringing in mandatory licensing of all private sector rental properties and we would appreciate if it the NLA could include an article on these schemes in a forthcoming publication. Thank you.

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