Housing (Scotland) Bill: letter to Minister

To: Minister for Housing
cc/ Deputy First Minister and Cabinet Secretary for Economy and Gaelic
cc/ Minister for Business

From: Professor Russel Griggs OBE, Chair – Regulatory Review Group
c/o RRG Secretariat

I am writing as Chair of the Regulatory Review Group (RRG) to provide independent advice on the Housing (Scotland) Bill which is currently at Stage 1 of the Parliamentary process and aims to prevent homelessness and improve the housing outcomes for people who live in rented accommodation.

This note provides an overview of the RRG’s role and details recommendations on definitions, use of funds, enforcement and communications considerations.

Regulatory Review Group (RRG)

The independent RRG was re-established by the Scottish Government as part of the New Deal for Business to support Scottish Ministers in improving the regulatory environment for businesses and their involvement in that process. The RRG’s membership is detailed in the annex. The RRG consider upcoming regulatory developments and as part of its work programme identified the Housing (Scotland) Bill as a scrutiny priority.

The RRG’s objectives are to:

• work constructively with the Scottish Government to ensure that policy officials and relevant Ministers are sighted on implementation challenges with regulations early in development
• deliver purposeful and targeted written and verbal advice to the Scottish Government, drawing upon extensive expert insight from business and regulators across Scotland
• support the delivery of the New Deal for Business by ensuring that the potential barriers to the success of Scottish Government policies are removed through an improved understanding of the practicalities of implementation

The RRG’s remit is to examine and identify implementation challenges and appropriate mitigations of regulation. The RRG does not provide a view on the appropriateness of substantive policy or decisions to be taken on legislative priorities.

Housing (Scotland) Bill

Along with RRG members, I met with your official on Thursday 26 September 2024. Your official provided an insightful presentation on the policy issue and provided detailed responses to our questions. This Bill provides the potential to significantly reduce homelessness in Scotland and improve the housing outcomes for people who live in rented accommodation, and it is in the spirit of supporting that endeavour that this advice is provided.

The following recommendations have been made by the RRG for consideration as part of the policy development and legislative process:

1. Successful implementation of rent control caps will hinge on the detail of design. The Bill introduces measures that will help with the affordability of rented housing and help improve the renting experience for those more financially vulnerable but  this may have a negative operating effect on landlords. Whilst the majority of the rented sector measures are not anticipated to represent a high-level of additional costs, rent control has been criticised as impacting on the financial viability of operating as a landlord including reducing their ability to invest in their current and future properties.

2. Greater clarity is needed within the Bill, especially on the monitoring and evaluation of rent control areas and how this will impact on rent and supply. There is also further information needed on the criteria that rent control will be judged against. The RRG does welcome the clarity that the Stage 2 amendments will bring and that the guidance for landlords is clear on the Bill’s provision to avoid any confusion and diverse interpretation. 

The RRG also notes the need to balance consistency across Scotland with flexibility for different regional areas. Not all landlords are large scale portfolio holders and institutional scale investors and it must be kept in mind throughout development of the Bill.

3. The RRG highlights the importance of balancing the Bill with other policy priorities due to the already declared national housing emergency. Rent controls in particular have generated uncertainty which is deemed to be impacting on investment in private rented housing in Scotland. Ongoing decreased investment in the sector may lead to a reduction in the development of new rented housing and some private landlords could choose to leave the sector, exacerbating existing supply challenges. The RRG recommends engagement with the Heat in Buildings policy team to balance priorities to try to lessen the potential negative cumulative impacts of legislation around housing generally but specifically for those in the rented sector.

4. Successful enforcement of this policy will require significant recourse. The RRG highlights the concern over cost and risk of implementation and enforcement. Like many other bills, resource will be an issue for Local Authorities as will the decision of who is carrying out the enforcement. The implication of low to no enforcement will cause significant disparity across the Local Authorities resulting in further housing issues. The RRG emphasises the need to increase resource for local authorities not only for this policy, but for all appropriate policies where enforcement is needed. 

The RRG invites your policy officials to return once this work has progressed and planned amendments included to further explore implementation challenges and constructively engage on mitigations, highlighting that the delay of the BRIA publication is bad practice. 

A copy of this letter will be published on the RRG’s webpage and has been sent to your Ministerial colleagues with an interest in this area.
The RRG would be happy to discuss the above recommendations with you and would welcome an update on how the Scottish Government intends to take this forward during the policy development and legislative process.

Yours sincerely

Professor Russel Griggs OBE
Chair, Regulatory Review Group

Annex - membership of RRG

• Professor Russel Griggs OBE, Chairman
• Fiona Richardson, Convention of Scottish Local Authorities (CoSLA)
• James Fowlie, Convention of Scottish Local Authorities (CoSLA)
• Brian Lawrie, Environmental Health
• David MacKenzie, Trading Standards
• Ewan Macdonald-Russell, Scottish Retail Consortium (SRC)
• Susan Love, Association of Chartered Certified Accountants (ACCA)
• Douglas White, Consumer Scotland

Members are representatives of business, regulators and consumers, however, are acting independently in their RRG involvement.