LOCAL GOVERNMENT AND COMMUNITIES COMMITTEE AGENDA. 2nd Meeting, 2018 (Session 5) Wednesday 17 January 2018

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1 LGC/S5/18/2/A LOCAL GOVERNMENT AND COMMUNITIES COMMITTEE AGENDA 2nd Meeting, 2018 (Session 5) Wednesday 17 January 2018 The Committee will meet at am in the James Clerk Maxwell Room (CR4). 1. Decision on taking business in private: The Committee will decide whether to take item 5 in private at this and future meetings. 2. Barclay Review of Non-Domestic Rates: The Committee will take evidence from Derek Mackay, Cabinet Secretary for Finance and the Constitution, and Douglas McLaren, Head of Local Taxation, Scottish Government. 3. Subordinate legislation: The Committee will consider the following negative instruments The Letting Agent (Registration and Code of Practice) (Scotland) (Miscellaneous Amendments) Regulations 2017 (SSI 2017/428); The Fife Council Area and Perth and Kinross Council Area (Keltybridge and Fife Environmental Energy Park at Westfield) Boundaries Amendment Order 2017 (SSI 2017/430). 4. Barclay Review of Non-Domestic Rates (in private): The Committee will consider the evidence heard earlier in the meeting. 5. Homelessness: The Committee will consider a draft report. Jane Williams Clerk to the Local Government and Communities Committee Room T3.60 The Scottish Parliament Edinburgh Tel: jane.williams@parliament.scot

2 LGC/S5/18/2/A The papers for this meeting are as follows Agenda item 2 Note by the Clerk PRIVATE PAPER LGC/S5/18/2/1 LGC/S5/18/2/2 (P) Agenda item 3 Note by the Clerk LGC/S5/18/2/3 Agenda item 5 PRIVATE PAPER LGC/S5/18/2/4 (P)

3 LGC/S5/18/2/1 Local Government and Communities Committee 2nd Meeting 2018 (Session 5), Wednesday 17 January 2018 Review of Non-Domestic Rates: Note by the Clerk Purpose 1. This paper provides background information on the Scottish Government s review of Non-Domestic Rates. Background 2. In December 2015, the Scottish Government announced a review of Non- Domestic Rates with the First Minister confirming in March 2016 that the review will be led by the former chair of RBS, Ken Barclay, and is expected to be completed by summer The Barclay Review consultation was launched on 13 July 2016 and closed on 7 October At its meeting on 26 April 2017, the Committee took evidence from COSLA, the Federation of Small Businesses, the Scottish Retail Consortium, the Scottish Assessors Association and Scottish Financial Enterprise. Following this session, the Committee then took evidence from Ken Barclay. Link to Committee paper for the meeting of 26 April 2017 Link to the Official Report for the meeting of 26 April In August 2017 the external review of Non-Domestic Rates by Ken Barclay reported its recommendations. 5. On 12 September 2017, the Cabinet Secretary for Finance and the Constitution set out the Scottish Government's initial response to the Barclay review. A statement was also made in the Chamber by the Cabinet Secretary for Finance and the Constitution, Derek Mackay, on the response to the report of the Barclay review of non-domestic rates. 6. On 29 November there was a debate in the Chamber on motion S5M-09221on the Barclay review and arm s-length external organisations. 7. On 14 December 2017, the Scottish Government published an implementation plan in response to the Barclay review. 8. In November 2017 the Scottish Parliament s Information Centre published a briefing on Non-domestic rates and operating surplus Scottish Government news release, 18 March

4 LGC/S5/18/2/1 Local Government and Communities Committee Consideration 9. The Committee agreed to take evidence from the Cabinet Secretary for Finance and the Constitution on his response to the Barclay review of Non Domestic Rates. Next Steps 10. The Committee will consider, in private, the evidence heard at the meeting on 17 January 2017 and any further action it wishes to take in relation to this matter. 2

5 LGC/S5/18/2/3 Local Government and Communities Committee 2nd Meeting, 2018 (Session 5), Wednesday 17 January 2018 Overview of instruments Subordinate Legislation 1. The following instrument, subject to negative procedure, is being considered at agenda item 3 at today s meeting: The Letting Agent (Registration and Code of Practice) (Scotland) (Miscellaneous Amendments) Regulations 2017 (SSI 2017/428); The Fife Council Area and Perth and Kinross Council Area (Keltybridge and Fife Environmental Energy Park at Westfield) Boundaries Amendment Order 2017 (SSI 2017/430). Procedure 2. Negative instruments are instruments that are subject to annulment by resolution of the Parliament for a period of 40 days after they are laid. All negative instruments are considered by the Delegated Powers and Law Reform Committee (on various technical grounds) and by the relevant lead committee (on policy grounds). Under Rule 10.4, any member (whether or not a member of the lead committee) may, within the 40-day period, lodge a motion for consideration by the lead committee recommending annulment of the instrument. If the motion is agreed to, the Parliamentary Bureau must then lodge a motion to annul the instrument for consideration by the Parliament. 3. If that is also agreed to, Scottish Ministers must revoke the instrument. Each negative instrument appears on a committee agenda at the first opportunity after the Delegated Powers and Law Reform Committee has reported on it. This means that, if questions are asked or concerns raised, consideration of the instrument can usually be continued to a later meeting to allow correspondence to be entered into or a Minister or officials invited to give evidence. In other cases, the Committee may be content simply to note the instrument and agree to make no recommendation on it. Background The Letting Agent (Registration and Code of Practice) (Scotland) (Miscellaneous Amendments) Regulations 2017 (SSI 2017/428) 4. These Regulations make amendments to the Letting Agent Registration (Scotland) Regulations 2016 and the Letting Agent Code of Practice (Scotland) Regulations 2016 to make provision for those carrying out letting agency work who do not hold or handle client money in relation to responsibilities under the Code of Practice. 1

6 LGC/S5/18/2/3 5. The Regulations also make changes to Letting Agent Code of Practice (Scotland) Regulations 2016 to ensure that it works effectively for all types of tenancy, including the new private residential tenancy. It also updates the Letting Agent Registration (Scotland) Regulations 2016 are amended to require applicants to the Register of Letting Agents to indicate in their application when their business began carrying out letting agency work. The policy note for this instrument is attached at Annexe A. 6. An electronic copy of the instrument is available at: 7. No motion to annul this instrument has been lodged. The Fife Council Area and Perth and Kinross Council Area (Keltybridge and Fife Environmental Energy Park at Westfield) Boundaries Amendment Order 2017 (SSI 2017/430) 8. The purpose of the instrument is to give effect to recommendations for changes to the local government administrative boundary between the Fife council area and the Perth & Kinross council area at Keltybridge and Fife Environmental Energy Park at Westfield submitted to the Scottish Ministers by the Local Government Boundary Commission for Scotland following completion by the Commission of its Administrative Review of this boundary. The policy note for this instrument is attached at Annexe B. 9. An electronic copy of the instrument is available at: No motion to annul this instrument has been lodged. Delegated Powers and Law Reform Committee Consideration 11. The Delegated Powers and Law Reform (DPLR) Committee considered these instruments at its meeting on 19 December 2017 and determined it did not need to draw the attention of the Parliament on any grounds within its remit. Committee Consideration 12. The Committee is not required to report on negative instruments, but should it wish to do so, the deadline for reporting on the instruments is 31 January The Committee is invited to consider the above instruments and whether it wishes to report on any issues to the Parliament in relation to them. 2

7 LGC/S5/18/2/3 ANNEXE A POLICY NOTE THE LETTING AGENT (REGISTRATION AND CODE OF PRACTICE) (SCOTLAND) (MISCELLANEOUS AMENDMENTS) REGULATIONS 2017 SSI 2017/428 The above instrument was made in exercise of the powers conferred by section 29(2)(b), 30(2)(f), 46(1) and 101(1) of the Housing (Scotland) Act 2014 (2014 Act) and all other powers enabling them to do so. The instrument is subject to negative procedure. Policy Objectives This instrument amends the Letting Agent Registration (Scotland) Regulations 2016 and the Letting Agent Code of Practice (Scotland) Regulations 2016 to make provision for those carrying out letting agency work who do not hold or handle client money. Section 8 of the Letting Agent Code of Practice, contained in the schedule to the Letting Agent Code of Practice (Scotland) Regulations 2016, sets out specific requirements for how client money (money which belongs to landlords and tenants) should be held and handled. Client money includes rent, tenancy deposits (for the period of time before they are lodged with one of the tenancy deposit schemes); and often a sum of money held on behalf of the landlord to cover repairs and maintenance. The Letting Agent Registration (Scotland) Regulations 2016 sets out the additional information those applying to join the Register of Letting Agents must provide within an application for registration including information that enables Scottish Ministers to assess whether an applicant is complying with key matters required in the Code of Practice, including in relation to client money. Through our engagement with stakeholders, it has become clear that not all those who carry out letting agency work, as defined by section 61 of the Housing (Scotland) Act 2014, hold or handle client money. This instrument therefore makes changes to take account of those operating in this way, to ensure those letting agents who do not hold client money are not subject to these aspects of the Code of Practice and are not required to provide confirmation in their application for registration. The instrument also amends the Letting Agent Code of Practice (Scotland) Regulations 2016 to ensure that it works effectively for all types of tenancy, including the new private residential tenancy. It removes a reference to legislation in paragraph 82 of the Code of Practice, which deals with prior notice for access to the tenanted property, to address a point raised by the Delegated Powers and Law Reform Committee in relation to the Private Housing (Tenancies) (Scotland) Act 2016 (Consequential Provisions) Regulations

8 LGC/S5/18/2/3 In addition, The Letting Agent Registration (Scotland) Regulations 2016 are amended to require applicants to the Register of Letting Agents to indicate in their application when their business began carrying out letting agency work. This information will help those administering the Register to identify letting agents who are currently operating but failed to apply to join the register by 1 October 2018, and new businesses who begin carrying out letting agency work before they have been admitted to the register. Applications from businesses in this position will be subject to greater scrutiny and will be charged a late application fee to cover the additional administration that will be necessary in those circumstances. Consultation Draft regulations were shared with a group of stakeholders for their input. This included the Association of Residential Letting Agents, Chartered Institute of Housing Scotland, Citizen Advice Scotland, Council of Letting Agents, CRISIS, Living Rent: Scotland s Tenants Union, LetScotland, The Law Society of Scotland, National Union of Students Scotland, Royal Institution of Chartered Surveyors, Scottish Association of Landlords, Scottish Land and Estates and Shelter Scotland. Impact Assessments An Equality Impact Assessment, a Privacy Impact Assessment, and a Children s Rights and Welfare Impact Assessment screening have been undertaken in relation to the regulation of letting agents and are published on the Scottish Government s website. Financial Effects A Business and Regulatory Impact Assessment (BRIA) has been completed in relation to the Letting Agent Code of Practice and Registration requirements and is published on the Scottish Government s website. A further BRIA has been undertaken in relation to the Registration Fee that those applying to join the Register of Letting Agents are required to pay. The BRIA will be published on the Scottish Government s website. While there are no direct additional financial impacts as a result of this instrument, the additional information that will be gathered by amending the Letting Agent Registration (Scotland) Regulations 2016, will assist in identifying those applications requiring further scrutiny. Businesses who have failed to comply with their legislative requirements will be required to pay an additional 270 to cover the costs of this further work. Scottish Government Housing and Social Justice Directorate 4

9 LGC/S5/18/2/3 ANNEXE B POLICY NOTE THE FIFE COUNCIL AREA AND PERTH AND KINROSS COUNCIL AREA (KELTYBRIDGE AND FIFE ENVIRONMENTAL ENERGY PARK AT WESTFIELD) BOUNDARIES AMENDMENT ORDER 2017 Policy Objectives SSI 2017/430 The purpose of the instrument is to give effect to recommendations for changes to the local government administrative boundary between the Fife council area and the Perth & Kinross council area at Keltybridge and Fife Environmental Energy Park at Westfield submitted to the Scottish Ministers by the Local Government Boundary Commission for Scotland ( the Commission ) following completion by the Commission of its Administrative Review of this boundary. The Commission is an advisory non-departmental public body created by the Local Government (Scotland) Act 1973 ( the 1973 Act ). It is an independent body that is responsible for reviewing and making recommendations for: the number of councillors on each council in a local government area; the number of wards for local government elections, their boundaries, designations and the number of councillors for each ward; and the extent of council areas. The legislation which sets out the rules for administrative area reviews is the 1973 Act. When making recommendations the Commission must consider the criteria set out in section 13 of that Act which sets out an overall aim of making changes in the interests of "effective and convenient local government". Once the Commission has submitted its final recommendations arising from such reviews it is for Scottish Ministers to decide whether to implement those recommendations. An administrative area review can recommend the alteration, creation or abolition of a local authority area. In practice the administrative area reviews that have been undertaken so far have led to only minor adjustments to boundaries and this is no different. Several administrative reviews have been undertaken since the current council structure was established in The Commission s administrative area recommendations will determine the council area where local residents live, and as a result may affect the level of council tax they pay. However, reviews do not result in changes to electors addresses or postcodes. This review has no practical effect on any local residents. Scottish Government decisions In considering whether to implement the Commission s recommendation the Scottish Ministers have paid close attention to the representations received by the 5

10 LGC/S5/18/2/3 Commission. No representations were made to Ministers directly. As a result of that consideration Ministers have decided to accept the Commission s recommendation for this Administrative Review. Consultation The recommendation that is being implemented by this instrument was produced by the Commission. The Scottish Government has not carried out its own consultations although it is aware of the responses that the Commission received to its consultations, and has not received any representations before or after submission of the Commission s final recommendation. The Commission conducted consultations with both councils and then with the public on its proposal before finalising its recommendation: all in accordance with the provisions governing the conduct of reviews set out in section 18 of the 1973 Act. All responses received were in agreement to the proposed change. The Commission s final report summarises the responses it received to its proposals. Details of the consultation conducted by the Commission, including copies of the responses it received to the consultations, are available on the Commission s website. Impact Assessments The instruments will not have any impact on Child Rights and Wellbeing, Equality, Privacy or the environment. Financial Effects The instrument will have no financial effects on the Scottish Government or on business. Scottish Government Local Government and Communities Directorate 6

11 LGC/S5/18/2/x APPENDIX A 7

12 LGC/S5/18/2/x APPENDIX B 8