It is with great pleasure that I open the debate. The bill was introduced on 30 October 2013, and stage 1 concluded with a parliamentary debate on 3 April 2014. The Local Government and Regeneration Committee considered the bill at stage 2 on 4 June, and today the Parliament debates whether to pass it. It is very much my hope that members will come together to welcome the bill and support it at decision time.
When I last stood in the chamber to talk about my member’s bill, it was known as the Defective and Dangerous Buildings (Recovery of Expenses) (Scotland) Bill. A lot has changed since stage 1, including the bill’s title, but I believe that change is good. My bill now delivers a more comprehensive approach to local authority debt recovery, encompassing not just local authorities’ work in relation to defective or dangerous buildings under part 4 of the Building (Scotland) Act 2003 but their work under part 3, in relation to compliance and enforcement.
An estimated £4 million of debt has been accrued during the period for which charging orders have not been available to local authorities. As I explained in the stage 1 debate, prior to the 2003 act, local authorities relied on charging orders under the Building (Scotland) Act 1959 to tackle debt associated with dangerous buildings. However, when the 1959 act was repealed and replaced with the 2003 act, the charging order mechanism was not carried over, which left local authorities with an increasing debt burden that needs to be addressed now.
Local authority debt recovery can be problematic for myriad reasons. A couple of examples that were given in evidence to the Local Government and Regeneration Committee at stage 1 demonstrate the diverse circumstances that can be encountered.
John Delamar, from Midlothian Council, talked about the
“deterioration of a chimney stack that is directly above a neighbouring single-storey property and above a public footpath right beside a bus stop”.
Because of the danger involved, there was a requirement for the local authority
“to fix the chimney by putting up scaffolding.”
He explained that the owner on the first floor of the property with the deteriorated chimney stack was “happy to pay”, whereas the person on the ground floor was not. He said to the committee:
“We are now in difficulties because the person on the ground floor, who had a business and other property, died, unfortunately. Therefore, we can no longer pursue the costs involved under our civil debt recovery methods.”
Gillian McCarney of East Renfrewshire Council told us about an example from her area. She said:
“We have a site with an absentee owner—I believe that he lives in Antigua. The council has incurred substantial costs in keeping the building safe. We understand that the owner is in discussions with several people to buy the site, and we have to continually check to see whether it has been sold.”—[Official Report, Local Government and Regeneration Committee, 19 February 2014; c 3119.]
Both council officers noted the advantages that charging orders would have had in those situations—they would have helped them to recoup their expenses on the sale of the buildings concerned. I have no doubt that most councils will be able to recount cases in which charging orders would have made a difference.
Before I move on to discuss the main changes that were made at stage 2, I put on record my thanks to those who have helped to shape and develop the bill. In particular, I thank the Local Government and Regeneration Committee for its scrutiny of my policy, the Delegated Powers and Law Reform Committee for its continued scrutiny of the subordinate legislation powers and, of course, those who have worked diligently to support me prior to the bill’s introduction and through its parliamentary stages. I particularly thank Claire Menzies Smith from the non-Government bills unit and Neil Ross from the legal team for all the help and advice that they have provided. Last, but certainly not least, I express my gratitude for the assistance that I have received from the Minister for Local Government and Planning, Derek Mackay, and his officials.
When I set out on this journey, I very much doubted that my member’s bill would get beyond stage 1, let alone one day make it on to the statute book. I did not allow myself to believe that that would happen. I believe that it will now happen because politicians have decided to set aside their political differences to collectively address the problem of local authority debt recovery. Congratulations must therefore go not to me, but to the Parliament as a whole.
I want to focus on the main changes that arose from the stage 2 consideration. The bill was amended in three main areas: it was extended so that local authorities’ actions would be encompassed under sections 25, 26 and 27 of the Building (Scotland) Act 2003, and it was amended to allow variation of the term of a changing order and to provide clarification of the liability of owners.
At the start of my speech, I referred to the change to the bill’s title. The reason behind that change represents one of the most significant changes to the bill. Local authorities have other enforcement powers under the 2003 act and, in some instances, they have to undertake work when an owner does not comply with notices that are served on them under those powers. Those powers relate to building regulations compliance notices under section 25 of the 2003 act; continuing requirement enforcement notices under section 26 of the 2003 act; and building warrant enforcement notices under section 27 of the 2003 act. The bill was extended to provide local authorities with greater certainty that they would be able to recover their costs in carrying out their duties under those sections of the 2003 act.
Action under those sections might not be as common as local authority action in relation to dangerous buildings, but it is no less important that local authorities have access to appropriate cost recovery tools when they have to step in to undertake work for compliance, enforcement or safety purposes.
The second area of change relates to the fixed 30-year repayment term. During stage 1, it became apparent that a number of local authorities had concerns about the fixed 30-year repayment term, particularly for lower sums. I readily acknowledged those concerns, so I brought forward a package of amendments to enable local authorities to determine the number of annual repayments that an owner must pay. The bill now provides for local authorities to determine the number of annual repayments, which must be no less than five and no more than 30. As well as addressing the point about the size of the debt, that change allows local authorities to take into account the debtor’s ability to pay.
The third area that I wish to touch on relates to the liability of owners. During stage 1, local authorities expressed concern that a property might be sold or its ownership transferred before a charging order could be registered, and they suggested that a notice of liability might help in that respect. On further investigation, it became clear that the crux of the problem related to timing. It should be possible for a local authority to register a charging order very soon after work has been carried out. Local authorities should not view charging orders as a tool of last resort, as they may have viewed them under the 1959 act; rather, they should be proactive in using them to secure the debt.
In conjunction with the Scottish Government, I looked into the possibility of the registration of a notice of potential liability in advance of a charging order but found that that would serve only to create a layer of bureaucracy that would detract from the simplicity of the bill. It would also have incurred additional costs for local authorities.
However, I recognised that liability might become an issue over the longer term as a property changed hands, which is why I lodged an amendment to clarify liability by ensuring that those who seek to avoid their responsibilities cannot. It provides that the buyer of a property, where a charging order has been registered, is to be severally liable with the seller for any unpaid amounts due by the seller under the charging order.
I will mention briefly the subordinate legislation powers. The Delegated Powers and Law Reform Committee suggested that my bill should be amended to allow Scottish ministers to directly amend schedule 5A to the 2003 act to alter the form and content of a charging order, rather than leave the prospect of that being done by way of subordinate legislation. At stage 2, the Scottish Government decided to make use of existing powers under the 2003 act to prescribe the form and content of a charging order and a discharge. Therefore, my commitment to address the point has been somewhat overtaken, as it has been addressed by other means. I will leave it to the minister to explain the new subordinate legislation provision in section 1A.
The stage 2 process and today’s amending stage have been crucial to ensuring that the bill delivers an effective and modernised charging order mechanism for local authorities to recover from owners sums owed when local authorities have stepped in to carry out work under parts 3 and 4 of the 2003 act. Looking to the future and the bill’s implementation, I understand that the Scottish Government will be producing guidance to underpin the bill’s operation and that it will also prescribe the standard form and content of a charging order and a discharge to ensure consistency of operation across local authorities. The bill will come into force six months after royal assent.
I move,
That the Parliament agrees that the Buildings (Recovery of Expenses) (Scotland) Bill be passed.
14:51