MHCLG Approves a Licensing Scheme for Waltham Forest

It had been suggested on the back of the refusal of the MHCLG to approve the blanket selective licensing scheme being sought by Liverpool City Council that this meant that large selective licensing schemes were effectively dead. The MHCLG has today proved that view wrong by approving a scheme for the London Borough of Waltham Forest https://walthamforest.gov.uk/content/government-gives-approval-large-scale-licensing-scheme-private-rented-properties-waltham.

Selective Licensing schemes allow local authorities to licence landlords in some or all of their area of responsibility. Previously these scheme did not require approval as the Secretary of State had given blanket approval for all schemes in England. From April 2015 this was changed so that Secretary of State approval was required for schemes that (taken together with other selective licensing schemes) covered more than 20% of the geographic area of the local authority concerned or would (taken together with other schemes) affect more than 20% of private rented sector homes in the area.

Liverpool had rushed their previous selective licensing scheme through in order to avoid the effects of the change in permission but were caught out by the changed regime when they sought to have the scheme renewed for a further five years. The MHCLG has not said in detail why they refused the scheme other than that it did not meet their criteria. However, one has to wonder if Liverpool hurrying the previous scheme into force counted against them. Liverpool has suggested that it will take the government to court to judicially review the refusal and if they do the MHCLG is likely to have to reveal much more detail as to its reasons for refusing the scheme.

It had rather been assumed that the refusal of the Liverpool scheme meant that the government was going to refuse all large selective licensing schemes. This would not have been a lawful position to take as that would imply that the Secretary of State had made up his mind on this in advance but undoubtedly it could have been the case that the bar would be set so high that the effect would be to refuse everything. However, the allowance of the Waltham Forest scheme seems to show that this is not the case.

There are differences though. Liverpool’s scheme covered all of Liverpool. The Waltham Forest scheme covers a lot of Waltham Forest but not all of it, two wards are excepted. It was also the first scheme of this size for Waltham Forest and not a renewal of an existing scheme.

So what can we take from this. Well larger selective licensing scheme are still possible. It seems that a blanket scheme which simply seeks to apply across the entire area is likely to be risky without very good evidence indeed. In other words, the MHCLG seems to find it harder to accept that the entirety of a local authority’s area of responsibility has issues with the PRS but will accept that much of it does. The second point to note is that the bar appears to be set higher if there is a renewal of an existing scheme. In other words, on a renewal it will be necessary to show why the five years of an existing scheme has not been enough to solve the problems and it will not do to simply wheel out the same scheme again for a further approval.

The key issues for local authorities will be that they must show:

1. that the scheme is truly necessary;
2. that is it necessary for the whole area that is being embraced;
3. that they have developed and learned from previous schemes; and
4. that they are considering all the options and using all of their powers as a part of a scheme.

This will be an interesting development and will hopefully lead to the development of further good quality schemes. Well developed and run licensing schemes can make a difference but they are not easy to do and they should probably be seen as a last resort.