My Lords, the co-pilot is in charge of this leg of the legislative journey, so there might be some turbulence.
There are two amendments that consider the resources available for the enforcement of the ban and I would like to take them together. I am grateful to the noble Lord, Lord Shipley, for his gentle dismantling of the arguments that the noble Lord, Lord Kennedy, put forward for Amendment 4. I recognise the pressure on the resources available to local authorities but we do not think that a provision that essentially provides a blank cheque to local authorities is the right approach. It would be a very unusual arrangement, and essentially one-sided, as the Secretary of State would bear all the losses and the local authority would keep all the gains.
We believe that allowing local authorities to retain money from financial penalties would be a significant funding stream for future enforcement, and the Government are providing some pump-priming funding for the initial period. There might be a role for hypo- thecated grants but I do not believe that this is one of them.
Financial penalties of up to £30,000 that can be retained by local authorities were first introduced in April 2017 under the Housing and Planning Act 2016, and I am sure that the noble Lord, Lord Kennedy, will welcome at least one measure under that Act that has found favour with him. We are aware that local authorities already benefit from the proceeds of financial penalties issued under that legislation. Liverpool, for example, has issued 42 civil penalties and has recovered the majority of them; Torbay Council has used the revenue from civil penalties to fund an extra enforcement officer for its housing team; and Newham and Camden have also issued and recovered a number of civil penalties.
However, we appreciate that this model depends on local circumstances and that it can take time to embed within existing frameworks of enforcement. That is why, as I said, we are committing £500,000 of additional funding in year one of the fee ban policy to support
education and implementation of the legislation. I agree with what the noble Lord, Lord Shipley, said in the earlier debate—that ideally this measure should be self-funding. If one looks at page 19 of the Explanatory Notes, one finds the following:
“The Government estimate that local authorities will incur a new burden in respect of enforcement costs in year one of the policy only and it estimates this to be no more than £500,000. The enforcement of the provisions contained in this Bill by enforcement authorities is intended to be fiscally neutral from year two since enforcement authorities may retain the proceeds of any financial penalties for the purposes of any of its enforcement functions relating to the private rented sector under this Bill or any other legislation”.
That is basically where the Government are coming from on resources.
Further, we are introducing the lead enforcement authority, mentioned by the noble Lord, Lord Kennedy, to provide guidance and assistance to local authorities in undertaking proactive enforcement. We have committed funding of up £300,000 per annum to support the lead enforcement authority in its duties, and we have based the funding model on that of the National Trading Standards Estate Agency Team, but we will keep it under review.
Statutory guidance issued by the lead enforcement authority or the Secretary of State will cover matters to be taken into account by enforcement authorities in determining the level of the penalty in any given case. We have been engaging with local authorities to get this right, and my noble friend Lord Bourne has shared a draft version with noble Lords and has placed a copy in the Library. More generally, the lead enforcement authority will be primarily responsible for monitoring enforcement of the ban and ensuring that local authorities have the guidance and support that they need.
Turning to the proposed new clause which deals with reporting requirements, Clause 23 already requires the lead enforcement authority to report to the Secretary of State on the ban. This will include updates on any developments that might be relevant to enforcement of the Bill or to relevant letting agency legislation, including those that might seek to undermine the aim and enforcement of the legislation. It could also include resources, mentioned by the noble Lords, Lord Shipley and Lord Kennedy. The Government will work closely with the lead enforcement authority and key stakeholders representing tenant, landlord and agent groups to monitor the operation and effectiveness of the ban. Against those assurances, I hope the noble Lord will feel able to withdraw his amendment.