David Sutton of the IHBC’s Scotland Branch Committee highlighted the potential of a ‘duty of care’ and benefits of VAT reductions as part of his evidence to the Scottish Local Government and Regeneration Committee at their recent meeting on the ‘Defective and Dangerous Buildings (Recovery of Expenses) (Scotland) Bill’.
To raise awareness of the importance of the Bill – which seeks to strengthen the recovery of works carried out in default by a ‘charging order’ on the title – and the potential benefits of his suggestions, he has also written a related article in the Herald and contributed to discussions on the IHBC’s Linkedin Group.
The Committee Meeting transcript records:
IHBC agrees that the current situation does not work well and that there is a lack of proactive work – the main danger is that the Bill seeks to tackle the results of the problem – rather than address how the problem might be prevented in the first place. In particular it fails to explore options such as:-
· How a formal ‘Duty of Care’ might best be promoted – perhaps starting with a formal legislative responsibility on all public bodies to protect, enhance and have special regard to Scotland’s historic environment in exercising their duties, and to designated assets in state ownership.
· How a fiscal policy could better encourage building repair and maintenance (eg say a £3,000 tax allowance over a 3 year period) to help improve maintenance, or
· Exploring whether – as recently suggested for London – Council Tax could be able to be applied at a double rate on vacant properties after due notice (say 2 years to allow time for action to sell or renovate the property). This seeks to address the current position that currently there is minimal financial penalty (indeed often a tax saving) on owners arising from letting a building deteriorate to the point of becoming uninhabitable, or
· How a lower VAT rate would act as an incentive to encourage repair and maintenance work (as opposed to the current new build VAT incentive. This might also address the current incentive to use non-VAT registered companies – and the related ‘cash’ economy. IHBC has worked with many other groups (such as Federation of Master Builders) to research the benefits of a lower (5%) VAT rate for heritage building repair work – and will be updating this research at a Westminster Parliamentary Reception on 3 March 2014. All too often a 20% VAT rate adversely affects the viability of refurbishment projects – favouring housebuilders over home owners. Hopefully government will realise that a simple, cost-effective relaxation of tax on maintenance and repairs can offer a much wider range of benefits to the treasury, while also supporting carbon reduction, building standards, heritage skills, and cheaper heating bills, as research and experience both demonstrate, or
· How ‘short life’ uses might be encouraged – whether from a national Scottish Short-life Housing Association, or encouraging ‘pop-up’ temporary uses. Temporary Licences (of at least 2 years) can help minimise deterioration during the development process and facilitate effective temporary uses.
Any of these options are likely to be more successful than the suggested ‘certification and inspection’ (MoT) regime suggested.
Dave Sutton said of the IHBC’s contribution to the development of the Bill:
‘I think our presence (and that of the Scottish Federation of Housing Associations) helped broaden issue from just Building Standards. It was also good that IHBC had set within the ‘bigger picture’, of vacant & derelict sites) – whereas other submissions focused more narrowly on the Bill (the Convenor did seek to query me on whether the reduced 4% BAR in England arose from ‘their more flexible planning use approach’! – my response was on HLF targeting grants to BAR). The BS officers suggested average cost of Defective Building Notice work around £3k – though I suggested there may be multiple actions on a problem site raising cost to ‘substantial’ (over £20k).’
‘There was broad agreement on many issues, with the sponsor of the Bill, David Stewart MSP, suggesting certain amendments at the end:
· On charging notice, to reduce 30 year period to 5 years – with flexibility according to level of debt, which was broadly supported.
· To link with Community Empowerment Bill and to also embrace the Liability Notice approach (as already in Historic Environment (Amendment) (Scotland) Act 2011), which then offers Council differing potential approaches according to circumstances
· There was a more cautious or mixed approach to applying a 2-year back-dating option, despite the current £3.9m accumulated debt. A preference for a Registers of Scotland ‘pre-registration’ stage for the Charging Order (or Liability Notice) of potential debt was felt to be more useful (given gap period between instructing works in default and presenting owner with bill) to deal with those who swap company owners etc to try and avoid responsibilities.’
A film and papers are now available at: LINK
Read the Briefing at: LINK
See David’s related article in the Herald at: LINK
Join the IHBC’s Linkedin discussion: HERE