The Enforcement Lottery: civil penalty usage by local authorities

Introduction

Over the last decade, the private rented sector has been making substantial improvements to the quality of its housing stock. The number of properties with a category 1 hazard under the Housing Health and Safety Rating System (HHSRS) has declined from 28% in 2009 to 13% in 2019.

Despite this, there are still a small proportion of properties in the PRS where conditions are potentially hazardous and need to be improved. In these cases, local authorities have been provided with a number of enforcement options they can use to raise the standard of the property.

These options include civil penalties which allow local authorities to fine landlords for specific breaches. The funds raised from the civil penalty are retained by the local authority and ring fenced for housing enforcement.

Aims & objectives of this paper

The purpose of this paper is to assess whether use of civil penalties has grown in the last three years.

In addition to this, the paper looks at whether any growth in civil penalties has been focused on improving property conditions, or whether it has been focused more on issuing civil penalties for low impact, easier to evidence, administrative breaches.

The paper is intended as the first in a series of papers looking at local authority enforcement measures.

About the evidence

The evidence in this paper is based largely on the results of a series of freedom of information (FOI) requests sent to local authorities in England.

The freedom of information requested each local authority provide the total number of civil penalties issued in 2018/19, 2019/20, and 2020/21.

In addition to this, local authorities were requested to provide the total number of civil penalties issued for the various potential offences that could lead to a civil penalty. These include breaches of HMO management regulations, failure to comply with an improvement notice, banning order or overcrowding notice, and breaches of any licensing conditions that may apply under Part 3 of the Housing Act 2004.

Key findings

• The number of civil penalties increased markedly after 2017/2018 but then remained relatively stable afterwards. This suggests that there is a lag time of around two years for adoption of new enforcement methods.
• 130 local authorities have used these new powers but most of the total civil penalties are issued by a small group of 20 super-users. They are responsible for 71% of all civil penalties issued to the PRS.
• A large proportion of the civil penalties are not focused on improving property conditions. The single biggest reason for issuing a civil penalty is a breach of selective licensing, making up 39% of all reported civil penalties. This is the only type of civil penalty that is completely unrelated to improving property conditions.
• In contrast, civil penalties focused exclusively on hazardous property conditions remain relatively low, even in areas with licensing in place. Civil penalties relating to improvement or overcrowding notices account for 16% of civil penalties.

Key recommendations

• The Government needs to ensure that local authorities have the funding to recruit sufficient staff with the expertise and training to identify and prove to a criminal standard that a hazard exists.  As a condition of this, the funds must be made contingent on improving property conditions rather than less impactful administrative breaches.
• The current legislative framework for property conditions should be reviewed with the aim of creating a single property standard for social and private renting across England. This would make it easier to understand, adhere to, and enforce the standard.
• Given that selective licensing breaches are not related to property conditions, consideration should be given to removing it from the civil penalty regime and introducing a fixed penalty notice for failing to hold a selective licence. Any funds raised over the cost of administering and enforcing the scheme could then be used to offer a partial refund to landlords who applied for and held a selective licence without local authority intervention.