The next item on our agenda is the statement by the Cabinet Secretary for Communities and Children: Rent Smart Wales. I call on the Cabinet Secretary for Communities and Children. Carl Sargeant.

Thank you, Presiding Officer. On the eve of the commencement of the enforcement powers, it is important to remind ourselves of the purpose of Rent Smart Wales. Our Housing (Wales) Act 2014 included groundbreaking legislation designed to improve the private rented sector through the mandatory registration and licensing of all private landlords and agents.

The sector is playing an increasingly important part in our housing system. It provides homes for many people, including some vulnerable people. There are many good landlords and lettings agents, but unfortunately the sector suffers from a bad reputation caused by the practices of others. Registration will identify, for the first time, the landlords who let properties and where those properties are. Licensing includes a fit-and-proper-person test and, importantly, training for those who directly let and manage properties. Ensuring landlords and agents are fully aware of their responsibilities provides greater security for tenants and helps raise standards, making the sector a more attractive proposition.

The Deputy Presiding Officer (Ann Jones) took the Chair.

The first year has been deliberately light touch, focusing on awareness raising and enabling landlords and agents to take the necessary steps to comply with the legislation. Whilst there is more to do, the achievement in the first 12 months is significant. By 9.00 p.m. yesterday, over 55,000 private landlords had registered and another 12,700 had started the registration process. Compare this to the previous voluntary accreditation scheme—after several years, only around 3,000 private landlords were accredited.

Not all landlords agree with the legislation or see the need for it. However, 96 per cent of those attending the training sessions have said it would make them better landlords, which is precisely what we are trying to achieve. There are benefits for landlords and tenants alike. Tomorrow, the final elements of the legislation come into force, which include the enforcement powers. They will reduce the scope for poor landlords to neglect their responsibilities, and for rogue landlords to abuse their position without fear of consequences. Ideally, we wouldn’t need enforcement. However, we know some private landlords will deliberately flout the law. This group will be targeted and if they fail to comply, they will face the consequences, including fines, fixed penalties, restrictions on evicting tenants, and rent stopping and repayment orders. Ultimately, they could be prevented from directly managing property.

Recent months have seen a huge rush to register, Deputy Llywydd, currently averaging around 1,100 landlords a day. As a result, Rent Smart Wales have taken longer than usual to respond to some of those calls and e-mails. I appreciate this has caused concern for some landlords who haven’t been able to complete the registration and licensing process. Rent Smart Wales have said that those who have started the process to comply will not face enforcement action if they’ve done all they reasonably can to comply. But this must not be seen as an excuse to ignore the law. My message to private landlords is clear: you must take action to comply with the requirements of the law. Enforcement action will be used appropriately and proportionally, but a failure to act puts you at risk of action against you.

Some have suggested the date for enforcement should be delayed. This wouldn’t solve anything. Some landlords would simply delay action until the next deadline, and the sooner we have enforcement in place, the sooner we can find and tackle the rogue landlords we seek. It’s also been suggested that the enforcement regime will fail because Rent Smart Wales only has nine enforcement officers. Everyone should realise that Rent Smart Wales also has the support of officers in all our local authorities, who will be proactive locally in encouraging compliance with the requirements. The approach is based on the premise that, for private landlords, ‘compliance is better than conviction’.

So, tomorrow will mark a significant milestone. Within a relatively short time, a huge amount has been achieved. Numbers registered to date are well beyond the estimated 20 per cent expected to have registered at the end of the first year, put forward in the explanatory memorandum of the housing Bill. I want to put on record my thanks to everybody at Rent Smart Wales, to Cardiff city council and to all local authorities for all their work. There is much more to do, Deputy Llywydd, but much has already been achieved.

We’ve arranged for the scheme to be independently evaluated over three years. The first interim report has been published today. Whilst the figures in the report are now out of date, it identifies requirements and potential issues going forward, including steps of relevance to enforcement, and these are in hand. The UK Government and a number of other countries, including Australia, are interested in the lead we’ve taken and are watching developments with interest. For me, the most important thing is what we do with this system so that it does make a positive difference to the lives of people in Wales who rent their home from a private landlord or agent. Thank you.

Thank you very much. David Melding.

Thank you, Deputy Presiding Officer. Can I start by commending the practice of the Welsh Government to carry out an interim report? This is an important change in public policy, and it seems to me very good practice indeed to thoroughly review the position and then to ask for ways in which the enforcement of the rolling out of the policy could be improved. So, I really think that that is to be welcomed, and I hope that the other Cabinet Secretaries that will be aware of this practice will follow it.

I would like to focus on the interim report, and it’s quite balanced. There are things that clearly have worked well and there are some areas that need some attention. The interim report does say there has been relatively poor planning. Perhaps part of the problem is your predecessor indicated that the Government did only expect about 20 per cent registration by this stage. Well, you’ve done much better than that, but I don’t think that was very helpful. I think that sent the wrong signal, and you would have been better off saying that you expected people, within that year, to meet their obligations.

I also think that the report’s finding that local authorities are somewhat confused about how enforcement will be taken forward, how they relate to Rent Smart Wales—and you did refer to the enforcement officers who are in Rent Smart Wales and then those who will be in the local authorities. How these will combine, how these teams will operate and ensure that appropriate resources are available for enforcement, I do think is a key matter, and that’s been identified in the report.

The awareness of mandatory registration as a requirement was fairly low amongst landlords, and I think the situation we’re in is that—you know, something over 50 per cent have now registered, but I suspect that those that haven’t are the harder-to-reach group, probably those landlords that have fewer properties, and some of them may also be very casual about their obligations. I think the majority of them probably are just unaware. Now, of course, they are responsible for that lack of awareness, but part of the problem, I think, has been that the promotional strategy has been successful in parts but perhaps not very successful at getting to those. So, I think you need to revamp the promotional strategy. This also leads to my point that, if you are now moving to enforcement rather than extending the deadline, I hope you ensure that we’re proportionate in our response because, at this stage, enforcement could just be ensuring they register, and I don’t think we necessarily need to move quickly to sanctions when people may have been unaware and, once it’s brought to their attention more actively, they then register quickly. That should be the aim so that we ensure that this policy change can work effectively.

I was very encouraged also to read that the training that has been provided does seem to have been very effective. I notice that about half of those that took part said it had led directly to an improvement in their own practice. Now, that is a good outcome but the interim report does say that the training needs to be ramped up. We need more of it, and I think that may be also something you will have to tweak and review as you get to those landlords who are less experienced or less used to—with a smaller property portfolio, and not devoting as much time perhaps to the obligations they have. So, I think there are some clear indications in this report about how you can take this policy forward, but I do accept that it’s been an important advance in public policy, and it’s something now where we’re quite prepared to look at the evidence. If it does produce higher standards for the sector, that’s going to be good for the sector, it’s going to be good for landlords and it will be good for tenants. So, we’ll keep a watching brief on this, but I think I can give two cheers at this stage.

I’m very grateful for the measured comments from David Melding there. I’m very happy with the two cheers. The fact that we’re getting two is better than none, indeed.

The points that the Member raises are important ones. It is about learning lessons from this new programme that we’re introducing, with people often focused on the process of Rent Smart Wales, rather than the reason we introduced it in the first place and the whole process of trying to tackle rogue landlords. Through the housing Bill, when we introduced that, I visited several properties where people were living in very dangerous conditions, and quite inappropriate conditions, under the threat of the landlord of, ‘If you say something, you’ll be out anyway’. I think it’s wholly inappropriate, and that’s why we’ve introduced this law.

In regard to the numbers—interesting when you said ‘the previous Minister’; I think, actually, the 20 per cent explanatory memorandum process was me. [Laughter.] There was a Minister in the interim between that also. But I don’t think we should be shy about the fact. Okay, 20 per cent was an underestimate, but I actually am really pleased that we’ve got over half registration early on in the registration process. From volunteering to be part of the programme with 3,000, now 55,000 properties registered is a huge difference.

Enforcement officers: the Member’s right to raise the issue. That’s now a process where, again, we’ll have to have a measured response to how we take forward enforcement. I’m keen to do that work with people and landlords who may have not been notified. I find it quite hard to believe, but I also understand that there are casual non-professional landlords who may just not be realising they are actually landlords. I need persuading, but, actually, I think the Member is right to understand the level of enforcement and how we would do that.

I’m not convinced about the awareness-raising issues that the Member raised, that we haven’t been professional or a process that we haven’t followed hasn’t been delivered. We’ve seen 55,000 new registrations. Indeed, my colleague Jenny Rathbone saw one of the adverts on the back of a bus in Cardiff, which she constantly reminds me of, which is a good thing. I think what my concern is is that the awareness-raising process has been ignored by some, and that’s what we have to try to understand about, about how do we get into the mindset of individuals who choose to ignore, and then enforcement may follow. But I'm grateful for the Member’s positive comments, and I do hope that the process we've followed, including the interim report and following on with a much more substantial report later on, will give us the evidence that the Member wishes to have clarity and confidence about, and also me as lead Minister on this.

God, this Government does like its hype, doesn't it? Including ‘groundbreaking legislation’: well, I think the only thing that I see groundbreaking in this is the complete incompetence with the implementation of this. It talks about a fit-and-proper test and, importantly, training. Well, it's a pity that that is not extended to Ministers. It was estimated that there were 130,000 landlords in Wales. So, if we have only 55,000 signed up, that's less than half. [Interruption.] Now, Minister, you're talking to me when I'm trying to do this reply to your statement, so, if you’d just give me a couple seconds, then you can come back to me, okay? Now, when I was a teacher, if you got less than 50 per cent, you failed. So, you know, I think this whole implementation is certainly a failure.

You talk about 96 per cent saying that it would make them better landlords. It doesn't actually say that, because 51 per cent said that they didn't find it much use, if you read the report. What this generally does is it places, I'd say, costs on small landlords, people who have another property just for their pension, really, and people are being driven out of the sector—and I’ve picked up casework myself of people being made homeless by landlords selling properties. I think that's important to remember.

If we look at the training, I would ask you: have you read the training? You know, have you read your own documents online, for example?

It's too late to read it now. [Laughter.]

I'm trying to find it. Because, if you look—oh, it’s the next sheet. If you look at what is online, it amounts to 60 pages of A4 text followed by a multiple-choice exam. There are no videos, there are few examples, there are few case studies, there are no diagrams, there's no interactive content. Now, this is really important, Minister, because, in other words, it breaches the Welsh Government's own guidelines in adult education, which expect content providers to tailor courses to the learners’ needs, and I would know that as a teacher. You’ve failed to do that. It's another failure on your part.

There is no section on the rights of tenants. Why not? In terms of the lack of engagement, a very simple question: why haven't you met with the Residential Landlords Association since you became Minister in May? Another shocking failure, really.

Now, I'm not one to criticise without giving solutions. So, I'll offer you some solutions now. I think the fee to register should be just £10. All the information could be sent out on PDF, free. That's not complicated. You could maybe have more detailed training for those who need it, as an option. That's not there at the minute. And you could work with insurers to create incentives for people to sign up. Mainly, you could delay enforcement, because what we're looking at here is over 50 per cent of people who could be facing sanctions, many of whom don't even know about this scheme. So, I think I've raised several questions there. I think your performance on this is quite shocking. I think if we had a proactive First Minister, you'd be picking up your P45. [Interruption.] I think the reaction of Labour Members there is interesting. So, there are a number of questions there, Minister. Could you please address them? I'm particularly interested in the online course, because you’ve failed your own guidelines.

I note the aggressive tone of the Member again in his contribution to the Chamber. Of course, through the process of the housing Bill, it would be remiss of me not to say that the Plaid Cymru group were very supportive of the process and, indeed, of the way that was structured. Unfortunately, we don't make legislation on the Neil McEvoy way of thinking in terms of how we should do things—because he thinks it’s right. It’s evidence-based solutions that we work on. The Member is incorrect when he says that I haven’t met with the Residential Landlords Association through the process. I have, on several occasions, met with them through the process of this. [Interruption.] I’ve noted the Member’s comments and his aggressive tone towards me, Llywydd. [Interruption.]

Let the Minister respond, please.

I’ve noted the Member’s comments, the content of which I will obviously give further consideration to—but not for today.

Picking up on the useful comments from David Melding, I think that there are clearly some people who have failed to register, because you’ve said that there were more than 55,000 registered as of 9 o’clock last night, plus 12,700 who’ve started the process. So, that’s some 68,000. I just wondered if you’ve got any idea of the numbers who might be involved who simply have ignored the call. I recall, when we took the housing Bill through committee, the idea was that there was something between 70,000 and 130,000 landlords—so, some indication of what you think the shortfall is.

Picking up on the point of David Melding, I think it’s appropriate to have a different attitude towards the proverbial little old lady who has one property, who may not have realised about the new housing Act, but we need to take a completely different attitude towards the professional landlords who’ve simply ignored this. I’m dealing with one at the moment who is endeavouring to convert a property in a way that is completely outwith the building regulations, and I have to commend the building regulations officers and the environmental health officers for the work they’ve done on this property, and their refusal to issue a building regs completion certificate until all the work has been done to a satisfactory standard. This is precisely the sort of landlord who—we need to ensure that we have an appropriate person who is registered so that the tenants can chase the landlord to carry out the defective works. So, I absolutely commend you on this Act, and as somebody who has probably one of the largest number of private sector homes rented out of any constituency, I appreciate that this is a really, really important Act.

A further detail I just wanted to ask you about—the possible financial incentives we might want to give at the end of the five-year term of the licence to anybody who’s prepared to carry out that licence. The early birds might get some sort of minor financial incentive to get them to engage. I think it’s really quite extraordinary, the work that Rent Smart Wales has done to get this number of people registered in such a short time, because so many landlords have left it to the last minute. By 13 November, they only had 46,300 registered, so the fact they’ve made it to 55,000 as of last night is really to commend the work that has been done by Rent Smart Wales. I’m sure that they will be able to count on the collaboration with Cardiff council to ensure that we chase those who are not taking their responsibilities seriously.

I thank the Member for her continued support. Again, the Member dealt with the detail in terms of the housing Bill when it went through the Assembly, talking to a range of stakeholders for and against the proposed legislation, and the shape of the legislation was an important landmark process for this institution. I’m glad we have made significant progress on that.

In terms of the numbers, again, as of last night, it was 55,000. We expect to see over the next two days—yesterday and today—a significant increase on that, with the last-minute approach by individuals to make the register. I will update Members perhaps with a letter in the next week or so with regard to the numbers that have finally come on deadline day, so that you and I are fully aware of that. I think what we have to be mindful of is that this is the law, but I also recognise that it’s about proportionality in terms of enforcement. I would expect the enforcement teams to look at this proportionately as and when they consider the enforcement process.

I visited a scheme, actually outside of Wales, where there was a scheme of similar enforcement and the irony was it was actually peer pressure from within the sector. People who were registered were saying about No. 12 who was a landlord and not registered. It was regulated within the market, which was really helpful because they also don’t want rogue landlords bringing a bad name to the system. It’s only right to do that too.

Unlike some of the ill-informed critics of this legislation or the implementation of this—there are one or two, as you may have heard this afternoon—I have visited the operation centre in Cardiff. I’ve met and spoke to the teams at the front end of this very difficult process of getting people registered. I pay tribute to the people that are there at the front end, talking with people and taking people through the application process. It’s not a straightforward one but it’s a necessity. It’s the law. I wish that Members would recognise that. Cardiff city council have done a great job in terms of what they’ve done for the whole of Wales in taking this operation forward. I wish them well in the future.

In terms of the incentive, it’s an interesting prospect. I’ll give that some further thought, because I think that incentivising people to do this and getting in early actually helps us as well. If we hadn’t had the rush at the end, we wouldn’t have had the delays in the applications. So, I will give that some more thought. Thanks to the Member for her contribution.

Thanks, Minister, for your statement. I don’t want to comment too much on the nature of the landlord registration scheme because that was contained in legislation debated and passed by the last Assembly. However, there is one point that slightly puzzles me, which is regarding the £144 registration charge, which is a flat fee. There are many reluctant landlords who find themselves renting out property owing to a family bereavement or similar circumstances. It does seem odd to me that those landlords have to pay the same amount as those who rent out multiple properties on a professional basis. So, I do wonder if it is the correct approach to have simply one flat fee.

Regarding the operation of the scheme, it is welcome that nearly all of the landlords who attended the training course felt it better equipped them to be landlords, but there are some issues that still need to be addressed. One big issue is that we simply don’t know how many landlords there are in Wales, which of course this registration scheme is designed to address. So, because we don’t know that, we don’t know how many have not yet registered, but the Welsh Government estimates that there may still be some 40,000 people who need to register who haven’t yet done so. Although this is essentially a rough guess, it does seem that there are large numbers involved, so I would ask if there is a sensible case for extending the deadline for registration or for some kind of amnesty period where enforcement or sanctions wouldn’t take effect, which has also been suggested by a couple of the other speakers in this debate. So, I would add my voice to that.

The other issue is the burden on local councils. I would ask the Minister what assessment has been made of the impact of the registration scheme on local authorities and what resources have been allocated to them. That’s all of the points I wish to raise. I do also need to declare a financial interest as I do have one buy-to-let mortgage. Thank you.

I thank the Member for his comments. Of course, the Member’s right to raise the issue that this legislation was passed in the last term of this Assembly with the previous Government. Now, it’s the implementation stage. Of course, I’m familiar also that the Member is yet to experience that process of legislation. One of his questions relates to the issue around—the Member used the word ‘burden’, but I would use the word ‘cost’—involved for local authorities. That is in the regulatory impact assessment. As we take through legislation in this Assembly, the Member will of course get familiar with that as we take forward further legislation.

I’ve been very clear about the proposal of extending the deadline. I will not be seeking to extend the deadline, for the reason I alluded to in my statement—that would just move the process further down. People who are seeking to use the final date for registration as their final application—that will be tomorrow, and if I was to extend it for another month or two, they would just use that date for two months, rather than tomorrow, which is not acceptable.

The Member is right about the flat-fee registration. This was, again, a very strongly contested proposal during the process of introducing the Act. Of course, there are many circumstances where families own properties and pass them to members of their family, et cetera. It’s really hard to disaggregate that. Actually, we believe that the flat fee at a relatively small level is a reasonable fee for all fee-paying registrations to take place; therefore, it was hugely debated, but was passed by this Assembly by a majority in the last Government.

I welcome the statement by the Cabinet Secretary, and I give him three cheers, as opposed to David Melding’s two. I recognise the importance of the Rent Smart scheme. We need to improve the overall quality and management of privately rented housing. I want to stress the importance that landlords—including accidental landlords—are aware of all their responsibilities. The rush to register at the end reminds me of the rush to submit self-assessment income tax returns as the last date for submission approaches. As the scheme is being independently evaluated over three years, will the Minister commit to produce an oral statement after each report is produced?

I’m grateful for the three cheers and the support of the Member—again, a Member consistent in his approach to the introduction of this piece of legislation. Of course, I will keep Members updated, as I said earlier on, particularly around the numbers for final registration, but also against process and enforcement. I will bring a statement to the Chamber in the early part of next year.

Thank you very much, Cabinet Secretary.