HC Deb 08 December 1970 vol 808 cc356-72

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]

9.3 p.m.

Mr. Nicholas Scott (Paddington, South)

Any hon. Member who represents a city centre constituency, perhaps above all a constituency in Central London, knows the complex problems surrounding the quality of life in such areas and the need for additional action, in some cases by way of new legislation and in others by way of increased Government intervention in the years ahead. Issues of transport and welfare, the provision of play facilities and provision for young people all come together in the inner City, and nowhere is that more apparent in a more compelling form than in terms of housing.

Looking at the population projections for central London, it is clear that the population will drop steadily from now until the end of the century and that there is some hope for thinking that we may see an improvement in the housing situation. On the other hand, when one looks at the housing developments taking place in and proposed for my constituency, there is cause for concern.

I hate referring to my speeches unduly, but in my maiden speech to this House on 19th May, 1966, I said: At the moment, two main types of development are taking place in Paddington. There is private development, largely catering for luxury needs, and there is the building of large council estates. My fear is that, if this process continues, eventually a line will be drawn between the two types of development. There will be two communities with little in common and virtually an iron curtain dividing them. As these areas are redeveloped, we should seek to create a truly balanced community in them and we should encourage the middle band of housing between the two I have mentioned. That danger remains. Although there have been some heartening signs of an encouragement of that middle band, there is still the danger, that, both in housing provision and in the projections of employment opportunities which will be open in central London over the next 20 to 30 years as skilled people are drawn out into the new towns, we will be left with those in the service industries, many of them low paid, and with the more affluent end of the community. I do not believe that this would be healthy or would make for a cohesive society in central London. We have seen on the other side of the Atlantic in some cities how this process can continue.

On 19th May, 1966, I went on to say: I want, next, to mention the work of housing associations in catering for the needs of the middle band of housing, for they can do an immense amount to help those who are in the worst housing state in the big cities. They can make a great impact on the type of multi-occupied property of which there is so much in Paddington by converting those houses into decent self-contained flats which could then be let at non-profit rents … What housing associations need is encouragement and loans from local authorities and encouragement from the central Government to enable them to make their full contribution to meeting housing needs in large cities."—[OFFICIAL REPORT, 19th May, 1966; Vol. 728, c. 1634–5.] I raise the question of the future of housing associations tonight because I think that it is an appropriate time to see how their work is developing and what further encouragement they might need from the central Government.

I should mention that I am the chairman of the Paddington Churches Housing Association which operates largely within my constituency.

Housing associations have great advantages in the inner London situation. They have a flexibility which is denied local authorities. They do not have to impose residential qualifications on those who apply for housing. This is perhaps the only area of housing provision where need is the sole criterion for admission. Housing associations do not even have to be able to pay the prices that they would in the private sector. They do not have to be able to afford to buy, as they would in the owner-occupied sector. They do not need residential qualifications, as they do in the council housing sector.

The work of the housing associations has grown. The Milner Holland Report estimated that from 1945 to 1963 housing associations of all types in London were providing about 200 dwellings a year. This year, in London alone, they will be providing over 3,000 dwellings, and developing very fast.

For the first time, housing associations have now begun to take over properties which are virtually wholly occupied. When large estates come on to the market housing associations have begun to buy them, not because they are providing empty accommodation, but because this is a way of ensuring continued good management of these estates which, if broken up and sold off to the highest bidder, might not continue. This is important in central London where we still have large numbers of controlled and regulated tenancies.

I welcome the new plans announced by my right hon. Friend the Secretary of State for the Environment for a new system of housing subsidies. This scheme will mean for the first time that, because housing subsidies are extended to tenants in private accommodation, housing association tenants will be able to be subsidised. It is a long overdue act to extend subsidy arrangements to individuals in privately-rented accommodation and to tenants of housing associations, rather than restricting subsidies arbitrarily to those who happen to live in the publicly-owned council housing sector of our housing provision.

There is—and I put this in by way of parenthesis—doubt about the real impact of this extension to private tenants in the central London area because of the rapid decline in unfurnished lettings in that area. We find that of those who come to us as a housing association and ask to be housed because of poor conditions 99 per cent. are living in furnished and not unfurnished accommodation. The distinctions drawn by our legislation, and the different forms of control exercised over them, has encouraged the development of furnished lettings, and I therefore wonder just how real the impact of the new subsidy provisions will be for private tenants in some areas.

All that highlights the fact that the work of the housing associations is important and is likely to be of growing importance as time goes by. I believe that we should ask ourselves what we can do to encourage them. I know that if I talked about legislation I should quickly be called to order, but let me simply place on record my belief that, ultimately, legislation will be needed in this respect, and we look forward to the Cohen Report to see what it has to say.

In the interim, however, there is administrative action which the Government can take. The first of these is to adopt a model scheme, a common scheme, outlining the relationships between housing associations and the local authorities, which are their normal source of funds. At the moment there is an uneven pattern in the country—indeed, there is an uneven pattern even in London—for the relationship and in the conditions laid down for that relationship. I understand that the Minister has a draft model scheme before him. This scheme need not be imposed by legislation. It could be given the backing of the Ministry and recommended to local authorities as a proper basis for the relationship between an authority and a housing association. I think that such a common scheme would give housing associations a great advantage.

Second, I believe that we can improve the administrative procedures to which housing associations are subject. At the moment, a housing association has to go back to the local authority for the approval of each individual scheme. The scheme can be as small as one house, or as large as 20 or 30 houses, or an even greater number, but for each scheme the housing association has to get approval for valuation and purchase, and the administrative burden on both the local authority and the housing association is very great. The housing association wants to keep down its administrative costs and to keep its staff to as low a level as possible.

I am told that the G.L.C. is worried that in fulfilling its undertaking to provide £75 million over three years to the housing association movement its real bottleneck may be the administrative arrangements in approving these schemes. It therefore seems reasonable that housing authorities which have been running for a certain length of time should be able to go to the local authority and ask for a block sum of money. Having, as it were, won their spurs by proving that they can run satisfactorily, they should then be able to ask for a block sum of money, and, subject only to an audit at, say, six-monthly intervals, or some other appropriate interval, to show that they have spent the money responsibility, they should be able to go ahead and then go back to the local authority for another tranche of money to buy further houses. This would speed up the procedure and help to keep administra- tive costs low both within the local authority and for the housing association itself.

Third—this may not come directly within the Minister's remit—the dividing line between the sort of housing which housing associations are providing and sheltered housing is narrow. If the housing associations are providing for old people, they can get a special grant for the "welfare" provision which may be an integral part of the housing provision, for a warden or for some other link with the residents.

In Paddington, we have a particular problem. It does not reflect particularly on the honour of Paddington, because it is a railway terminus. About a third of the lettings within our housing association, the Paddington Churches Housing Association, go to unsupported mothers of one sort or another. We need to give these girls support other than simply providing them with a roof over their heads. We can do with someone virtually full-time simply teaching domestic management. We could do with child care to free the mothers so that they can earn their own living. This general field of being able to provide, or supporting, welfare services as an integral part of the housing provision for certain groups is something which the Government should consider. Again, I do not believe that it will require legislation; they should be able to do it administratively.

Finally—this is not a point directly for the Government, but I hope that it will be in order—my housing association was formed by the churches of all denominations working in Paddington, but there are other associations which are not so linked. I should have thought, that, if there were one characteristic of city centres in addition to poor housing it is that they tend to be "over-churched". The provision of churches was for another age and another pattern of worship. There seems to be a case for the churches coming together, on an inter-denominational basis preferably and trying to see how they can use church buildings more rationally to cater for present-day congregations. If they then said that they were prepared to sell off the surplus churches to cost-rent housing associations, they could make a real contribution to meeting the housing need in central London, a much more rational use of their own resources, and a really great demonstration of the relevance of the church to the future of our urban areas.

Mr. Speaker

Order. With respect, I think that that is some other kind of ministerial responsibility.

Mr. Scott

I will hastily move on, Mr. Speaker, and come rapidly to a conclusion.

I do not ask the Minister for specific commitments and pledges. I do ask him, however, to recognise the importance of the housing associations and to pledge Government support for the continued vigorous expansion of the work which they are doing. They have a great contribution to make in our city centres, particularly if we are to halt this polarisation of which I spoke. I hope that he may be able to give me some hope on the points that I have raised.

9.20 p.m.

Mr. Nigel Spearing (Acton)

I am grateful to the hon. Member for Paddington, South (Mr. Scott) for raising this topic. We are fortunate in that our other business finished earlier than anticipated, so that I have an opportunity to comment on this subject, though I promise to be brief.

The issue which the hon. Gentleman has raised is particularly apposite because we are awaiting with interest detailed statements of Government policy in regard to the changes in their schemes of housing subsidy, and the hon. Member for Paddington, South referred to this. Naturally, however, I am not as sanguine about it as he is.

We are concerned not only with city centres. We also have in mind areas of housing renewal and particularly those areas in cities which were built up between 1850 and the turn of the century or just after. These houses were built for social purposes which are no longer relevant to the areas. The physical state of this property is not as good as it should be and one must choose whether to renew it completely or go in for a lot of rehabilitation.

I join with the hon. Gentleman in saying that this is the sort of area—Paddington is one example—where the housing association has an undoubted rôle to play: in the centre of a town and just outside the centre of an older built-up area, Acton is one, which is full of Victorial property, now in need of a great deal of attention.

I reinforce the hon. Gentleman's remarks about the rôle which housing societies and associations can play in providing for particular needs. He mentioned one such need. There are occupational needs which make a call on our housing resources and which must be met by the community by official, unofficial and voluntary organisations.

There is another advantage in a housing association; it can go in for a small-scale development, a gap between existing houses, a street corner site or a site that may be up for redevelopment. Churches provide a good example of this and I reinforce what the hon. Gentleman said on this score. Here the housing associations can play a valuable rôle, in rehabilitating, modernising and converting older property, particularly in areas which are not scheduled for redevelopment. The housing association can do a lot within a reasonable time schedule.

A great advantage, too, is the fact that people can provide voluntary skills. They can give of their time and energy in a part-time capacity as well as in a full-time, professional one. This means that the whole energy of the community can be directed to valuable projects of this kind. There is, as a result, a great gain for the population as a whole. Some of these Victorian houses on four or five floors are at present arranged so that cooking is done on the landing, without proper bath and lavatory facilities. These houses can be converted excellently by a housing association. The Notting Hill Housing Trust is one of many such organisations which can be called to mind in London and the surrounding area. The redevelopment of open virgin sites is another matter and it may happen that housing associations do not have the same rôle to play in these areas as they do in the sort of conditions I have outlined. Unfortunately, there is, perhaps, a fashion in thinking that housing associations can step in everywhere.

In my Borough of Ealing there has been an example which perhaps the Government are considering because it has particular relevance to the rôle of housing associations raised by the hon. Gentleman.

Some years ago the London Borough of Ealing had about 30 acres of land available for its own building and it decided, as a matter of policy, to allocate the land to housing associations for the erection of 832 dwellings. One site, for 320 dwellings, was allocated to an association which had only just started up. I believe that in the Friendly Societies Register its capital now stands at £8. Another one in another area, which was allocated five acres of land for 150 dwellings, has a cash balance of £80 and was founded in September, 1967.

Unfortunately, both these associations have been unable to assure either the council or the Ministry of Housing and Local Government, as it then was—now the Department of the Environment—that they are in a fit position to develop these areas as they stand. The result is that instead of being fed into the housing programme of the London Borough of Ealing this land has remained fallow.

Even had it been built on, the London Borough of Ealing, although it provided the capital, would have had only a 75 per cent. nomination of the places. I take the hon. Gentleman's point that a housing association can have its 25 per cent., but this land was purchased by the authority specifically for its own use, and the authority's nominations would be cut by that figure. Further, the authority had decided to provide a subsidy of about £100 a year per dwelling for the dwellings in which its nominees would live.

Therefore this rôle, which I suggest is one which has not been outlined either by the hon. Gentleman or by myself, is a substitutionary rôle rather than an auxiliary one. I agree that in many areas the auxiliary rôle can be as important as, if not more important than, new construction.

The situation here is perhaps an unfortunate example of what can happen, because in 1969 completions in the London Borough of Ealing totalled 486. In 1970 they totalled 964. In 1971 the number will drop to 55. In 1972 the number will rise again to 803. From 1973 onwards it will be over 700. Therefore, rather like a lost cog in a wheel, because the land has been left and has not been built on, there is a shortfall of 500–600 dwellings in the coming year. This will create great hardship in the area because, perhaps through over-idealism or some misjudgment, the authority of the day put a greater degree of faith in this type of development than at that time it merited.

Therefore, although I go a long way with what the hon. Gentleman has said, I think that he has put his finger right on the spot by saying that in looking at the future of this type of housing provision, which I certainly support, as I know do many of my hon. Friends, we must closely examine the administrative procedures. New and untried societies venturing into a field which is highly technical and which involves many skills may find themselves in difficulties. I have no doubt that the association with which the hon. Gentleman is connected is well experienced in its own field. I think that there are many others which are so experienced.

However, if we are not careful, we may find ourselves in the position where in trying to speed the production of good housing but in fact we delay it.

I hope that the Minister, in considering the decisions which have to be made inside the Department, will evaluate the most effective role for these associations, bearing in mind some of the experiences which have occurred throughout the country, of which I have no doubt that the Department is aware.

It has been a privilege to speak in this debate, because there are people on both sides of the House who have great concern for the housing of people, particularly in the older areas of towns and cities. I am grateful to the hon. Gentleman for raising this topic.

9.28 p.m.

The Under-Secretary of State for the Environment (Mr. Paul Channon)

The whole House will agree that we are indebted to my hon. Friend the Member for Paddington, South (Mr. Scott) for raising this crucial subject of the future of housing associations. We are also grateful to the hon. Member for Acton (Mr. Spearing) for his contribution, which I shall study with care at leisure.

By talking about the problems of London and of the inner core of London, which he knows so well, my hon. Friend has dealt with one of the most crucial social issues of the day—the problems and quality of life of society in the inner core, its environment: all the vital matters in which housing plays such a very important part. My hon. Friend referred to his maiden speech in 1966, which I remember very well, on housing in London. I know also of the work to which he referred of the Paddington Churches Housing Trust. I agree with him about the importance of that work and of the work of housing associations in general.

I welcome this opportunity to reiterate the Government's intention to encourage the work of housing associations, indeed, to encourage the work of the whole voluntary housing movement. In the past it was sometimes argued that the introduction of the Welfare State would spell the end of voluntary effort and that people would have to look to the State in future as the universal provider of care and benefits from birth to death. It would have been calamitous if that prediction had been verified, but happily voluntary effort is flourishing today as strongly as ever, and I think more strongly than ever in the housing world. I am certain that the future will always provide room for a real partnership between the State and voluntary bodies, and voluntary effort will continue to add an important and essential element to the range of the social services provided in the community.

Housing associations, which are nonprofit-making bodies devoted to the provision or improvement of housing for people of modest means, have a very important contribution to make towards solving our housing problems, which can have a social aspect. I suppose that the main ways of tackling housing problems will continue to be the building of more houses for sale to owner-occupiers and the building of more houses for renting by local authorities. But I believe that the emphasis on the work of housing associations will substantially increase in the years ahead, and I hope that it does.

First, the provision of housing by housing associations will increase the choice available to people looking for a home. In our society, people's housing needs vary considerably, and it is right that they should have as big a freedom of choice as we can arrange.

Second, and very important, housing associations provide an additional source of finance for housing. I think in this connection of the venerable bodies such as the Peabody Donation Fund, the Sutton Dwellings Trust and, if I dare mention it in the House, the Guinness Trust. I am not sure whether I should declare an interest any more. Given the magnitude of the housing problem, which I do not under-estimate, it is important that all these extra funds should be used to the utmost extent and effectiveness.

The hon. Member for Acton raised some cases in Ealing where he says that they are not being used to the utmost effectiveness. He would not expect me to comment on them without a chance to examine them. I shall certainly consider his point, but this is primarily a problem for the London Borough of Ealing, and I am not sure how much I am entitled to inquire into its affairs.

Mr. Spearing

The question I wished to raise, and emphasise now, is not only whether those bodies are administratively capable but whether that type of development is the correct and most beneficial rôle for housing associations as such. I and many of my hon. Friends doubt it

Mr. Channon

I should not like to comment on the particular problems of Ealing without notice. Whether housing associations are the right solution there must be a matter for those who know the problem of Ealing far better than I do. In general, I certainly think that the housing associations have a crucial rôle in conversion and improvement. I also believe that they have a very important rôle in building new houses. Perhaps I can develop that point a little later.

Housing associations have already shown that they do invaluable work in renovating and renewing older houses. This year the number of houses that housing associations have modernised and improved will be a record. It is now widely recognised that area improvement is desirable, not only because it raises the present level of living conditions in a neighbourhood, but also because it prevents the future needless expense of clearing properties that did not have to become slums. Some authorities have divided their territory among several associations in order to get the maximum benefit from their labours and, of course, this has been a success in many cases.

My hon. Friend mentioned the question of block loans being given by local authorities to housing associations when they have proved their worth. I am sure he knows that the G.L.C. and a number of other local authorities are operating this system at present. I am sure that he is right in saying that this is useful where it can be done.

I believe that the housing association can often be more flexible or adventurous than a public authority, whose activities have to be governed to a much greater extent by set rules. It is answerable to its electorate and must try to keep a balance between different and conflicting claims. A housing association, on the other hand, may set out to deal with special cases if it wants to, and no one can hold it against it that it is not dealing with every case.

For example, one can have an association which sets out to provide housing for the elderly. A number of distinguished associations operate in this sector. This, indeed, is one of the greatest housing problems facing the nation. Again, one may have an association to provide houses for ex-convicts, for example. No one criticises it for not dealing with the young or those not in jail. Housing associations can specialise. It is rash to claim that everyone can be covered by our social services. It is difficult to visualise the stage at which no one would ever slip through the net. Housing associations very often meet special needs, such as those I have mentioned.

Mr. Scott

I apologise for interrupting my hon. Friend on a point which he has already passed, but it took me a little time to realise exactly what he had said. My hon. Friend said that the G.L.C. was already operating a block grant scheme. As I understand it, what it does is to grant a local authority approval for a total sum of money but that authority still has to go back to the G.L.C. for approvals within that sum for each individual house or each individual block of houses it intends to purchase. The G.L.C. has to approve at each stage, and that is the delay. My case is that one ought to have approval just to go ahead and spend the money and that, after the fact, there could be an audit to check that the money has been spent sensibly.

Mr. Channon

I am advised that what my hon. Friend has said is in fact being done by the G.L.C. with block loans in the way he has outlined, and that they are being given to suitable housing associations. But in view of what he has just said, I will check up on the matter and write to him, because this is a very important point and one with which I am in considerable sympathy.

For all the reasons I have outlined, the Government intend to do all they can to assist housing associations. How best they can be assisted raises a great many questions which are not at all easy to resolve. One of the first actions of the Government on taking office was to decide to collect the evidence which was being collected at the time by the then Cohen Committee, which was studying the future of the voluntary housing movement. I have seen some of the work which has gone into this, and it is a massive document.

The Committee took evidence not only from housing associations themselves on how they thought their efforts could be increased, but also from local authorities in their experience with housing associations. We are studying the evidence that has come in and I hope that we shall soon be in a position to say something more constructive to the House than I have been able to say tonight.

At first sight, the voluntary housing movement presents a bewildering variety of types and a surprising number of associations. No one wishes to extinguish variety simply for the sake of tidiness, but some of the most experienced spirits in the movement have sounded a note of alarm at the sheer proliferation of associations which has taken place in recent years. Ought the ideal to be to have an association in every neighbourhood or every street? Or is it not much better to have a smaller number of bodies with growing assets on which they can rely and on which they can readily borrow for further growth?

The older housing trusts started off with funds bequeathed or collected. Nowadays, an association may begin with negligible assets, relying solely on the enthusiasm or the professional skills of its members. I agree with what the hon. Member for Acton said about involving all sorts of people in the work of the housing associations.

In this case an association can be rather vulnerable. We all know that to be effective in improving old houses and building new ones an association needs to satisfy certain exacting conditions. First, it must have a properly trained staff. Housing management is no job for amateurs. An association that allows rent arrears to build up or property to fall into such disrepair as to disgust existing tenants and repel prospective ones will soon get into the state when the only remedy, if the property is not to be sold up, is for some more competent body to take it over. Nor is it good for prospective tenants—and this does not happen so much in London—to come to a site to see what is going on and to be referred elsewhere to gain entry. Associations must be professional about these things.

An association should have a detailed knowledge of the area in which it works. It is then possible to obtain land more easily and to take advantage of local variations in values. I read recently a successful business man explaining his own success. In one London street houses on one side sold for £20,000 while on the other side they sold for £5,750 and almost three-quarters of home buyers moved only a couple of miles. There is a need to be professional because it is no good buying an apparent bargain if the site turns out to be waterlogged or if vast expense is needed to make it fit for housing.

Just because housing associations are non-profit-making or virtually so, this should not imply that they do not need to be as business-like as anyone who makes a living from the job. It is terribly sad when, in a small minority of cases, an association puts up buildings without having considered the likely demand for houses or flats of a certain kind or the number of people likely to want them at the rents which would have to be charged to repay the money borrowed and to keep the property in repair. Proper market research is essential here as elsewhere.

In addition, substantial working capital is needed. Without it an association may well miss an opportunity of acquiring some site or existing properties for conversion. As has been emphasised by those who know a good deal about housing associations, if there are difficulties in construction which cannot always be foreseen or prevented, there can occasionally be cases where associations may have to leave the building unfinished, to be taken over by some financially stronger body.

The House would agree that the encouragement of the work of housing associations is not only a matter of stimulating the setting up of more associations. We intend to take the necessary action to put the housing association movement into the right framework, with correct financial disciplines and the appropriate means of financing their activities. We must have associations that are manifestly competent and equipped with the necessary resources to inspire confidence in their credit-worthiness.

At the same time many distinguished people in the movement point out that the history of earlier non-profit-making enterprises underlines the importance of controlling the ultimate destiny of the equity in property provided from housing associations with the aid of public funds or guarantees. It has happened that rented housing provided for people of modest means has appreciated in value, passed out of control and has been disposed of in the open market. It is not right that public money should be loaned to an association for the provision of rented accommodation that would not be provided without such free lending and then, after a time, the body should be able to repay the loan and exploit the assets for the benefit of those who at the time comprise the association. That is not to mention the possibility that the exploitation will affect the situation for some time before it is realised.

These are the dangers that can arise and we must be sure when encouraging the movement that we guard against them. In encouraging the growth of associations we must ensure that there is no way of exploiting public funds for private purposes. What we will do in examining the situation is to try to provide a more business-like framework in which associations can operate. I have under consideration a draft model scheme provided by very distinguished people in the movement which goes into great detail. I hope that it will not be too long before I can give some more information about this. Housing associations have a spendid opportunity to make a great contribution to the fulfilment of some of the major aims of our housing policy. We are actively considering ways of helping them further, and statements will be made as soon as possible.

The House will know of our major aims in housing policy—an assault on the twin problems of unfit housing and over-crowding, better housing for people in special need, such as the elderly and the disabled, the modernising or redeveloping of older housing to put new vitality into our city areas, the provision of more rented accommodation to provide a greater choice for people who for some reason cannot be or do not wish to be owner-occupiers, including the young and mobile, at one end, and the elderly who find keeping up a house too much for them at the other, and perhaps most important of all the encouragement of home ownership which is the best bargain that anyone in this country can possibly have.

Housing associations can help in achieving many of these aims. But with their present multitude of small bodies the housing association world bears a great resemblance to the world of building societies 50 years ago. Today the building society movement in this country is the strongest in the world and we are exceedingly lucky to have it. We are studying how to achieve our goal of jumping 50 years in a short period and enabling the housing association movement to take an equally important place in our society. To achieve this, I welcome constructive suggestions from any quarter.

I shall study with great care the remarks made tonight when considering the studies being prepared in my Department from which we hope to announce conclusions before too long. If any other hon. Members have constructive suggestions to make about the future of the voluntary housing movement, I shall be only too glad to consider them. We are now at the formative stage when we are beginning to consider our policy in this crucial field. Housing associations and housing societies have a crucial rôle to play. They are the third arm of the housing movement. Anyone who is concerned, as those who have spoken tonight are, about the appalling conditions which exist in London will know what an important rôle housing associations and housing societies can play as a palliative in helping to solve some of the problems raised tonight. The Government are determined to do everything in their power to encourage the growth of the voluntary housing movement.

I very much welcome the initiative of my hon. Friend the Member for Paddington, South in raising this matter tonight.