Petitions Committee

Item 2, then, is the evidence session for P-06-1307, 'The Welsh Government should commit to the adoption of the maintenance of new housing estates by local authorities'. I'm pleased to say we have Mark Harris with us, who is from the Home Builders Federation in Wales. Mark, thanks for being with us. Perhaps I could ask you first to give a slight update on the federation itself and your role within it.

Thank you, all. I'm Mark Harris, planning and policy adviser for the Home Builders Federation in Wales. I've been doing the job nearly 10 years now and I've worked in Wales for many years. We represent large national house builders, but we also represent the larger small and medium-sized enterprises and family-run businesses in Wales, as well, and we're involved in all sorts of policy developments across Wales.

Thank you for that. This is our second evidence session, I think. We had the Member of the Senedd for Caerphilly, Hefin David, in front of the committee some time ago now in relation to this. He's done a lot of work—I know other Members in the Senedd have, as well. This has been of interest to a number of Members for their own reasons and their own issues in their own constituencies. So, we're grateful to you for being here on behalf of the Home Builders Federation in Wales. We'll start with questions, and I'll go to Peredur Owen Griffiths.

Diolch, Cadeirydd. Thank you very much for coming today. I'd like to start with—. Could you give us an outline of why we get into these arrangements, what the technical side of things are, what happens when new estates are built, and obviously, then, the arrangements that are made—? Is it common for this sort of thing to happen, or is it something that happens on an ad hoc basis? Maybe you could give us a flavour of what it's about.

Yes. We start with a piece of land being bought by a house builder. He then gets planning permission for that land and, as part of that planning permission, there is normally a requirement, on top of him building the houses—I guess in an ideal world, the house builder would cover every square inch with a house—the planning permission will often require a number of other things to be provided. So, obviously, highways, on which most of the services run, but, then, the main area that we are talking about is the public open space, and that is a specific requirement of planning permission. I think it's worth noting that the type of public open space has changed over the years, and it varies, depending on the size of the development, between informal, formal play areas and different types of open space.

From a developer's point of view, their starting point is that they would like to get rid of any liability involved in that piece of land. They're not set up to be a management company, the house builder; they're there to build houses and sell them. So, their starting position is that they will try and get as much of the land into individual sale plots to individual owners. What's left, in an ideal world, they would like the council to adopt. Historically, that is what has always happened and what most people who pay their council tax, for instance, would expect—that the local authority would look after the roads, empty the bins, look after the public open space. So, I suppose there are two main reasons why we've got to where we are. I think the less acceptable reason, in some ways, was that house builders found that it was becoming harder and harder to get things adopted, and that was around the time it took and the cost involved. And often, the cost involved came very late in the development process. So, normally, when you develop a piece of land, you build as many costs as you can upfront into the viability so that you know the site is viable. What was happening was they were getting to the point of having to hand over public open space and the local authority would say, 'Well, that's great, but we need this lump sum of money.' I used to work for a house builder, and I'll give you an example where we were handing over a piece of public open space. We built and paid for the public open space. We then had to cover the cost of maintaining it for 30 years, and we also had to cover the cost of complete replacement of all the play equipment halfway through that 30-year period. So, that was a sizeable sum of money overall.

So, that's one reason why it's happened. The other reason is that many councils—and I've got an example in my notes—have the planning policies within the local development plan, and that's followed by what's called SPG, supplementary planning guidance. We're starting to see more and more supplementary planning guidance relating to open space, stating that the council will not adopt the open space, and it's for the developer, in providing it, to put forward a way in which it will be managed. So, those are the two main drivers behind it.

Across Wales at the moment, what's the scale of that issue, with regard to builders not being able to hand over, or being left with public open space that they need to find a way of managing?

I'm not able to quantify it, but I would say it's a growing issue. I think the lack of resources across local authorities has meant more of them are becoming more nervous about taking on adoption, and it's also led to them taking far longer to agree—. We've all seen housing estates that have been lived in for five, 10, 15 years, and the roads still aren't adopted, because they're still arguing over a chip on a paving stone, or, you know—. They don't want to take anything on that's going to cost them money, because they haven't got the money to look after it.

And is it one side more than the other, or is it fairly—? I suppose, who is to blame? Is it more that the public finances are being so squeezed at the moment that any liability that goes on to the local authority is causing them to find ways of not adopting?

I think it's a considerable factor, yes. Added to that, potentially, is the lack of resources as well. I mean, most of the national house builders employ a person whose only job is to deal with adoptions; they do nothing else all day but deal with adoption issues. And most of the national house builders have probably got five, six, seven sites ongoing, at most, at any one time. So, it shows you the level of work involved in trying to deal with it.

Okay. Thank you very much.

Yes. Thank you, Pred. Rhys ab Owen.

Diolch, Cadeirydd. Thank you very much for attending today. Those were very useful answers to our colleague Peredur. I just want to ask a few supplementary questions. When did this start to become an issue? When did you realise that this was becoming an issue?

It's been around a while. I worked for a house builder 13 or 14 years ago, when I left working for an actual house builder, and it was starting to be an issue then. So, it's been around quite a while. It's certainly not something that's happened within the last four or five years; it's probably nearer 15 years, at a guess.

Okay. So, do you know—and say if you don't; don't worry, we certainly don't want to try and catch you out—whether this was an issue 20 years ago?

I don't, no, sorry.

No, okay, fine. Why can't the costs be agreed beforehand? What stops the costs being agreed between the local authority and the house builder or the developer at the time that the planning permission is granted?

I can't think that there is a reason. I'm sure that the local authority will say that there's a reason, but I don't know what that is, but I also can't think of why there shouldn't be a reason for it to be agreed upfront.

I think what I wanted to check with you is whether there's some building reason that, when you start a development, you're not quite sure how things will be and whether that's the reason. But from your point of view, from a builder's or a developer's point of view, you can't see that as being a reason why costs can't be agreed.

No. I mean, the planning permission that goes with the land will have a condition that requires the development to be built in accordance with the plans, and there will be detailed plans. I think we all accept that things, once they're built on the ground, are always subtly, slightly different to what they look like on a plan, but there certainly shouldn't be any significant differences.

I just want to touch on something that Peredur mentioned. He asked you whether this is an issue across Wales—I think that's what he was trying to get at. With regard to the supplementary planning guidelines, is this something that councils across Wales are doing? Do you know how many councils in Wales have that in their supplementary planning guidelines?

I don't know an exact number. I think the thing with the supplementary planning guidance is that they can only be written once you have an approved plan, and, obviously, as some of you will be aware, we have got issues with delays with local development plans in Wales. So, although they all have supplementary planning guidance, much of the supplementary planning guidance is quite out of date now; it's based on policies that were written 10 or 12 years ago. So, I think we're about to see a whole raft of plans being refreshed and renewed, so what will follow that will be a whole raft of new SPGs where I suspect that this will become more common.

Okay. Can you give us an example of a local authority that has this at the moment?

Yes. I've got in my notes here—this is Bridgend, who are actually about to renew their plan. In 2020, they wrote an SPG, and in there it talks about the fact that—well, it says,

'The Local Authority will not adopt under the heading of outdoor play space, apparatus or structures including their surface areas and standoff zones that have a primary function that is not open space.'

So, they are requiring open space with play equipment in, but then they won't adopt the play equipment within it, so that's one example that I found.

And I take it it doesn't say why, but we can all gather that it's due to the squeeze on local authorities.

It doesn't give a reason.

Okay. Thanks for that. We've heard some really terrible stories about management companies, for example, an invoice being sent to households without a breakdown of costs and house buyers saying that they weren't aware of the costs when they bought the house. But can you give us an example of (1) where it's beneficial that it actually happens, and (2) an example of where it does work very well.

I was given these questions in advance and thought long and hard about this one. Unfortunately, we tend to only hear the bad stories, don't we? There's no reason for people to tell us the good stories. There must be hundreds of developments across Wales that have management companies in place, and I'm presuming there aren't hundreds of sites where there's an objection sitting not being dealt with. So, there must be examples out there, but I don't know specifically of any. I've spoken—in fact, he's retired now, but he was a managing director of a house builder, and he lived on a development where there was a management company, and it was one where the residents were involved. He was giving examples, saying, 'Well, we have a management agreement, but we have the ability to amend it. We have a sum of money we pay and we know what services we get for that. But if we decide we want things done better, or we want the grass cut more often, or we want the grass cut less often, we can make those decisions, and accept that if we want more done, we might have to pay more.'

I think there has been a move away from—when I became aware of management companies first being set up, they were organisations that could have been based anywhere in the UK, they basically just collected the money and then employed a local agent to cut the grass or do whatever service was required. You entered into a contract when you bought the house with them, and that was it. There was very little you could do about it, it was just a contractual agreement. I think the more modern management companies, and this might come on to some of your other questions, involve residents actually being involved and allow break clauses, so that you might have to have it for the first three years, but, after that, you can review it and change it, and the residents who agree to be part of that management group, obviously, then can make those decisions.

So, you're saying if it's done properly it can be a way to empower local communities to make their own decisions, rather than rely on a council or a distant management company.

I think definitely, and it's probably the last question you asked, but, as I understand it, it's not an industry that's necessarily governed in any way at the moment, and there are no set standards or templates to use. So, I definitely think in terms of going forward, you might not be able to solve the old problems, but in avoiding future problems, there could be some better guidance and some governance given to the industry so that there is a standard set.

Thank you, Mr Harris. That's particularly interesting, the final point, and certainly something I think we'll look into as a committee. Diolch yn fawr iawn.

Diolch, Rhys. Can I just, before we move on to further questions, maybe tease out a bit more your last point in particular? Buffy Williams and I visited, with the petitions team, the Cwm Calon estate with Hefin David, the Member of the Senedd for Caerphilly. I think what we saw there was a real group of residents who are interested in their estate, who wanted to better their estate, as many residents do, where they obviously live. But they'd set up their group, I think it's the Cwm Calon Community Association, and their group was set up on the basis of there are problems that have arisen from the estate management companies et cetera. They set up the group to try and iron out some of these issues, to try and take away—similar to what you tried to describe there. That agreement they have with the estate management companies, with the local authority, with the developer et cetera is a voluntary one. Would you see a benefit in making that more of a regulatory one, where they're required to come forward, perhaps every quarter, and meet with a group of residents who have put themselves forward to be on this established group?

Yes. I think the model that that's sort of touching on is more the model that we now see—the way management companies are set up. And it touches on one of the other questions, and one of the other points, which is: it's about when residents find out about this. Now, the proper time for people to find out about this is when they go into the sales office, and this issue has been looked at by Welsh Government back in 2018, and I myself actually did some cold calling of my own members' sites to see what was going on, and I didn't tell them who I was, went in; there's the nice model, 'Oh, there's some open space. What's happening with that?' And the salespeople came out straight away and said, 'Well, we're not sure at the moment.' And that's often the problem, that the negotiations with the authority about possible adoption are still going on at the point when the developer wants to get on site and start building. But you've obviously got—. Particularly if you're going to end up with a management company where there is a charge on residents, that decision has to be made before you sell the first house. You can't make that decision after you've sold five houses, because those five people wouldn't be involved in it. And effectively, you are entering into a contract with a company who are financially gaining from providing a service, so you start to then get into contractual law of how you break that down, how you alter it. So, I think, yes, the ability the residents to be involved, and obviously—sorry—what you don't know at that stage is: are you going to get any residents moving into your houses who are going to be interested? Because for it to work properly, they've got to be board members and take on the liability of being a board member of a company, and there's a lot more to it than that, than just meeting once a year. It's quite a big thing. And obviously, if they move, does the next person who moves in take it on? So, there are so many unknowns about what it will look like at the point when the decision has to be made, and I think that's what causing some of the issues.

So, would the preferred position be residents of the local area, the estate—some of them sitting on the board of the estate management company, rather than a group of residents holding quarterly, biquarterly meetings—

Yes.

Okay.

One of the grey areas that's developed around that is that that board initially has to be set up by members of the house-building company to create the board, because there are no residents at that point, and the first 10 people who might move in may not be willing to be on the board, so sometimes, on the face of it, it looks like it's been set up by the developer and they've got complete control of it, but they want to get off that board as quickly as they can. They want to encourage other people to take their positions and run that board.

Thank you. Peredur.

On that point, just thinking out loud and not having thought it through 100 per cent, but is there any scope, if the county council doesn't adopt, for community councils and community councillors to get involved in potentially helping with this sort of situation, where they're elected representatives of people in those wards? Potentially—we've got quite a few community councillors across Wales; I think 8,000 or something like that—is that something that could work, or is it something that's filled with issues with regard to—?

If I'm honest, it's probably filled with issues, having had some dealings with community councils in the past, but certainly some of the larger ones who are better resourced and maybe already look after that type of thing. There are examples of developments where it's a private development, but there's a percentage of affordable housing, and the registered social landlord responsible, who end up managing their bit, and they've said, 'Well, while we're managing that, we'll manage the rest of it', because they've got in-house resources to cut grass and do the maintenance, so it becomes an income stream for the RSL. So, yes, there are alternative models out there, definitely.

Thank you. Joel James.

Thank you, Chair. Thanks, Mark, for coming in this afternoon, to talk about this, and I just want to pick up something that Rhys mentioned about when we've had evidence sessions, we've had people who haven't been aware that they've signed up for this, then. And I just wanted to talk to you about how could that be addressed going forward, because you mentioned the difficulties of actually knowing when a developer is going to offset the development to the council or to a former management committee. I know, from past experience when I was a councillor, we had housing developers who had already sold houses before they'd had planning permission, and I suppose the difficulty then is that, should they go down the route when they'll have to offset that to a management committee, it's then people who purchase knowing that, 'Well, if I want to buy my dream home, I've then got to commit to this or I've lost the house that I've just—'. And I just wanted to get some idea of that, really.

And then also, and you touched on it in a previous response, again, a bit more about best practice from a buyer's point of view—what they should expect, really, then from the developer in building this. And then, I suppose, really, to get your thoughts then on what you'd like to see from a council perspective. Because, again, my view, when I was a councillor, was that I always felt that councillors saw developers as a cash cow that they could squeeze to get in section 106 agreements that they couldn't necessarily afford to meet themselves. I just felt that—. And I remember once a planning application, when I was on the planning committee—the council had sold land for residential development, and then declined residential development planning application because it was outside the settlement boundary. So, I think there needs to be a bit of openness from local authorities as well about that.

I think, in terms of the residents finding out about it, then it's definitely something that the sales office should do, so that you know as early as possible, and even if that's, 'We're not sure at this stage, but there are two scenarios.' It's difficult, isn't it? It's not for me to say what's an affordable amount, but my understanding is that on most generally average housing sites, you're looking at a maximum of about £200 a year. So, this isn't a massive sum of money when you're buying a £300,000 or £400,000 house—it's not a massive sum of money. And I think it would be interesting to know whether or not the issue is about the money you've got to pay or is the issue about the service you get?

And I guess, also, we've seen it with local authorities, the grass that we remember 10 years ago that was cut every two weeks is now cut every two months at best. Is that for environmental reasons, which it's often badged as or is it because it saves money? I'll leave you to decide on that. So, people have different perceptions about what they would expect done as well, and it's managing all that.

Welsh Government did look at this through building regulations a few years ago, and there's what's called a 'homeowner's pack', and unfortunately, that is an A4 lever-arch file full of all the instructions for your boiler and everything else, along with all the technology, so those folders are getting bigger and bigger and bigger. And, yes, there will probably be, in most households, a sheet in there that explains it, but it will get lost in amongst all the other information. And actually, in the excitement of finally buying that dream home, it just gets lost, even though they have been told it. We probably should do better as house builders in evidencing that we have told them to avoid those discussions later on.

But I suppose, ultimately, coming back to the first point I made, in an ideal world, I think we would have all of this adopted by councils, because that's what most people still expect and that's what most people think their council tax pays for. It's a little bit of a naughty example to give, but I was in a meeting in Rhondda Cynon Taf County Borough Council a few years ago—I shouldn't name the authority, but I will; now I've done it, haven't I—and their parks department came along to a development forum and sat there and said, 'We're thinking of taking the council's parks department and privatising it, and we'd like to let you know that you can buy the services off us through your management company to look after the public open space', and I slightly cheekily went, 'Will you be turning up in the RCT council vans to cut the grass?', and he went, 'Oh, yes, no, I hadn't thought of that.' Because those residents are seeing a council van turn up, thinking that council tax is paying for it, but then they're getting another bill, because they're actually acting as a private company. So, yes, I think it's about openness and honesty, isn't it? And, obviously, I think some of that has clearly been lost, which is why we've got into the situation that we're in, unfortunately.

As a former RCT councillor, that doesn't surprise me. [Laughter.]

Peredur Owen.

Just on that bit, you're saying that the onus could be on the sellers, with your binder, but where does conveyancing come into this? Where does the legal aspect of making sure that—? Because obviously it's a legal document that is involved. Is the onus on the conveyancer to make sure that people are aware of what ongoing contractual obligation they might have?

I presume, if there is a contract, then it would be picked up in the conveyancing. I guess, again, it's the situation that there are so many things in the—. With most modern houses, you shouldn't be parking a caravan on the drive, you shouldn't be running a business from the house. There are lots of things that are in your deeds that most people don't know about until it becomes an issue.

But not something where you'd have to pay something on an annual or a monthly basis.

You'd have thought they'd have been notified about that, wouldn't you? It does surprise me if they're not. Again, I think potentially the only reason I can think is that it just gets lost in the madness of buying your new house and all the things that go along with moving into a new home.

Okay. Thanks.

Thanks, Pred. Any further questions, Joel? No. Okay. Buffy Williams.

Thank you, Chair. Thank you for joining us this afternoon. I know Jack has just touched on the visit that the Petitions Committee made near Caerphilly, and I have very similar housing association and privately built houses on one plot in my constituency. You have the housing association houses that are all kept lovely and the gardens are all cut, and then you have the privately bought houses who have no idea whose responsibility it is for those gardens and the no-man's-land, as it's called, then, to be trimmed and kept nice.

We've heard in our committee horrendous stories of housing estates where residents have no clue whose responsibility it is or who it falls to, then, to maintain the areas around, and it is a real worry and, actually, it affects the health of the people living on these housing estates. What are the key steps we would need to take to resolve these problems, do you think?

I would say that I totally agree that it is wrong that you don't know and don't understand who is responsible for a piece of land, particularly on a new development. I thought about this having seen the questions. I guess one obvious thing would be some sort of register, a registration system, so that when a new development is built, if it isn't adopted by the council, then there is a place where it is registered. I would imagine—I can't confirm, but I would imagine—that the house builder who has bought that piece of land, it would be a single deed but then they would subdivide all the deeds to the individual houses and they will look to create a deed for all that no-man's, leftover land and pass it on to someone. So, there will be an owner somewhere, there will be someone responsible for it in most cases, but it's just finding out where that information is.

And I remember when I looked at this before, I asked members for information about it and got a bit—some came back to me, some didn't. And actually I ended up finding—I can't remember the name of it now, but there was a website set up by objectors on which you could register your housing estate if you had issues with the management company, and that actually was quite a good source to find out which areas were managed. But, obviously, they were all the ones where there were problems. There were none on there where people were happy with it, you only registered on it if you had an issue. I'm guessing that website still exists.

I think the other issue is we've got the very small developers as well, not the huge housing estate developers but the very small independent ones that are selling houses off-plan and then residents are being left with issues where they've been slapped with things from the council to cut trees back and keep the central reservation islands neat and tidy when that's not something that they signed up for, basically. But, obviously, other householders, then, they don't want to see that type of mess and trees hanging into their gardens and into footways—very much what we saw, Jack, when we went on that visit: overhanging trees going into public footways, the residents are being slapped with fines from the council, then, to employ somebody to come and cut the trees back. That's becoming more and more of an issue. I know, in my constituency at the moment, that's a huge issue, and I've got it coming through the door basically almost weekly now. Who does it fall to then?

The starting point, I would imagine, should always be the local authority, because they would be who people would naturally go to about an issue like that. If it affects the public domain, then you go to the public authority. So, they should know if they've adopted it or if they haven't adopted it, and if they haven't adopted it, they should know who's responsible for it. I don't think my members would have any objection to having to notify the local authority or create a central register for Wales, or a regional register, of where sites are that aren't adopted, who is the management and what are the contact details. I can't see any issue in doing that.

Thank you. Thank you, Chair.

Thanks, Buffy. We'll be reporting as a committee on this later on this year. We're trying to seek some more evidence, probably from the Welsh Local Government Association, and the Welsh Government will have to respond to our report. What would your view, or your members' view, be on the role the Government should play in this, and are there any specific actions the Welsh Government should take? I know you've mentioned that you did a piece of work with the Welsh Government back in 2018 when they looked at this issue. It's clear today and it's been clear in our visits, and I think in our communities in general, that this is a problem that needs some attention. Again, what role do you think the Welsh Government should play, and are there any recommendations that you would like to see us as a committee consider?

I did quickly look back at the previous work, and if I remember rightly I think the Minister—and it was Julie James at the time—did come out with a statement, and I think we were just starting to talk about the reforms of leasehold, and obviously that's affected by the UK Government as well. I think that put the brakes on the Welsh Government doing anything specifically themselves, because they needed to wait for that bigger picture of reform to happen. Obviously, that has slowed and hasn't actually happened. So, I think we've got to be mindful that some of the solutions may be tied up in UK Government decisions.

I guess someone does need to take a lead on this, and the Welsh Government, I think, probably are one of the obvious people. Ultimately, they do have the power—. I won't say to tell local authorities what to do, but certainly to provide a policy framework that guides local authorities. Certainly, the areas I've touched on would be some sort of control over the companies that provide this, so certification or some sort of system you'd sign up to, so you can't just have one man and his mower being responsible—it has to be a reputable company; and some guidance, which I think probably would be best developed in conjunction with the industry, and also the companies. There are a number of companies who are well established. I think Meadfleet are one of the original companies that did this and are still in existence. I think it's about 200 or 300 sites that they have that they manage. And then I think it's just understanding that relationship between who's responsible for either storing the data about what the situation is in terms of who owns it and who manages it, and how that's made publicly available, and where and when it's made publicly available.

Thank you for that. Any further comments from Members? Peredur.

Just something that's occurred to me. You talked earlier about £200 being the average. Would there be any merit in a standard tariff across Wales?

I think there's some potential merit, but because every piece of open space is different, so it's different in size and it's different in—

Based on square foot or square metres.

—and it's different in what its maintenance is. The other thing that ties into this is that public open space, potentially, is getting used for more things. So, we've got SuDS, sustainable urban drainage systems. We've got biodiversity net gain. All of those things are playing into how land is used in different ways, and we haven't got enough land in Wales for each of those things to be dealt with on a separate piece of land. We refer to it in the house building industry as 'stacking', so you get more than one benefit from the same piece of land. So—. I've lost my train there, sorry. So, yes, I think, certainly with SuDS, what we're talking about is a potentially standard cost per item. So, there might be a cost per square meterage of grass, or a price per square linear meterage of a particular type of feature. So, you can sort of say, 'Well, I'm doing X amount of this', you can go to the multiplier and work it out. What I've heard when we've talked about that in other areas with Welsh local authorities in the past is they all have different ways they work out their costs. So, although they've got that general policy requirement for cost recovery, some will factor in the cost of the building, and all sorts of extra costs. It isn't about how much it costs that man to go and cut the grass; they add lots of other costs. So, local authorities, I know, would like that flexibility to be able to not stick to maybe one set of costs. But from my members' point of view, consistency makes things easier, and I think it's likely to result in better delivery and better outcomes, if you're not having to have a separate conversation every time you do it.

Okay, thanks. That's great, thank you.

Thank you, Mark. In your response before to the last question I asked you, I think you said 'Meadfleet'. If I remember correctly, I think that is the estate management company on the site that we visited in Caerphilly. We're actually struggling to get evidence from estate management companies. You said in evidence there are some positive estate management companies where communities are embedded in them. I'm not asking for now, but, perhaps, when you go away, if you know of any who'd be willing to give evidence to committee, we would be grateful for that contact. As I say, we'll be seeking evidence from the WLGA. The Welsh Government will be responding. We're grateful for your time today. I think, if there's no further questions, I'll draw this session to a close, unless there are any further comments you'd like to make.

No, all I'd say is we work with the Welsh Government all the time, so if this does result in any sort of policy development, then we'd love to be involved and be part of that.

We're very grateful, Mark. Can I thank you once again, on behalf of the committee, for being here in front of us? We may have some follow-up questions in writing, and, likewise, if there are things that you would like to tell us, please do so, get in touch. There will also be a written transcript of the session that we will share; if you could check that for factual accuracy and make any amendments if necessary. But, for now, it's very kind of you to be here, and thank you for your time.

Thank you for inviting me.