HC Deb 07 August 1975 vol 897 cc788-99

3.2 p.m.

Mr. Michael Mates (Petersfield)

I am grateful for the opportunity of raising an urgent problem which has arisen in my constituency. I thank the Minister for coming here to answer—fully and frankly, I hope—my questions.

The matter which I seek to raise is not a party political issue. I do not seek to make party points. I am well aware that the problem of finance available to local government is far wider, and does not apply only to the case which I seek to outline.

I hope that the House will allow me to confine my remarks to the situation which has arisen in my constituency.

I am well aware of the severe restraints under which the Minister's Department is operating at the moment, but I have come to tell the House about good management and bad management and the events of the past months concerning the improvement plans for council accommodation in my constituency. This, I believe, is a case of bad management, as I shall hope to explain during the next few minutes. I naturally hope that the Minister will agree with my assessment of the situation and be able at least to give me the encouragement that he will look at the matter again and reconsider his Department's decision.

As a result of the Secretary of State's recent decision we now have in my constituency a quite ludicrous problem. It would not be fruitful to go back into the history of the causes of the neglect of the council accommodation in Alton—suffice it to say that there were many factors, not least the way in which the reorganisation of local government affected this area. Nevertheless, since its inauguration just over a year ago the East Hampshire District Council has set about its tasks with enthusiasm, imagination and sound common sense. I should like to pay tribute to both the officers and members of the district council for the way they have set about their task. As early as 18th April last year—just over two weeks after it came into being—it decided that as a matter of priority it must pay attention to the appalling condition of some of the council houses in Alton. This is the largest part of the problem, although there are some houses in Liss and Bramshott, as well, which were in much the same state.

These houses, built in the early 1930s, have deteriorated over the years until they are now thoroughly unsatisfactory and in some cases dangerous. They have unplastered walls, ungalvanised metal windows, which are generally so distorted as to be now incurring considerable maintenance costs, lath and plaster ceilings which are generally seriously deteriorated and electric wiring which may in some cases be dangerous. The only method of heating is a cast-iron back boiler type of grate, the parts for which are no longer available for routine maintenance. In general, the conditions under which council tenants are living are thoroughly inferior and unsatisfactory.

The housing committee decided, in accordance with the Department of the Environment Circular No. 50 of 1972, to embark upon a modernisation scheme for a total of 122 houses. In July 1974 loan consent was granted for the purchase of 12 mobile homes at a cost of £60,000 to provide temporary accommodation for council tenants while renovation took place according to a planned programme.

In August, the Department accepted a tender for improvements to a show house in order to mount a public relations exercise amongst the community to involve them as affected families, and to convince them how worth while the scheme was. In September, the work on the show house was started, and it was completed in December 1974. It was furnished by a local firm. Meanwhile, work commenced on the mobile homes site. This site was made available, temporary planning permission was given for the erection of the mobile homes, and the work went on through the spring and summer, finally being completed a week or two ago. A public meeting was called to discuss the modernisation programme with the tenants. Press statements were issued announcing the improvement programme. In February 1975 tenders were sent out for the modernisation of 47 houses, which was the first part of the plan.

I should emphasise that the programme had already been cut by half by a responsible decision of the council as a result of local authorities having been asked to retrench. Prior to this it was planning for a modernisation programme of more than double this number.

The district council then received a letter from the Department of the Environment dated 28th February limiting the expenditure between 1st April this year and 31st March next year to the sum of £114,000. Added to this, the council is compelled to charge the whole of the cost of the erection of the mobile homes against this year's allocation, although the mobile homes will be in use for several years while the programme continues. This decision means that, instead of the planned improvement to 47 houses—which figure was already cut by half—there is now only the finance available to improve 10. Not only this; there is a requirement for only three of the 12 mobile homes, and, furthermore, there is no use to which the rest can be put. They cannot be let to reduce the grave housing shortage in Alton, for several reasons. There are clearly problems because the homes, having been set up as temporary accommodation, are fully furnished. If they are let to tenants from the waiting list the tenants will have security of tenure and there will be problems about their own furniture.

Finally, the site of the mobile homes carries only a temporary planning permission, since the sole object was to use them for a short time to facilitate improvements in the area.

We now have a situation in which £60,000 has been spent, the programme associated with this expenditure has been decimated, and the council is saddled with a white elephant and some angry tenants. To add to an already utterly ludicrous state of affairs, while the council is prevented from modernising its own accommodation, under other regulations it is free to spend sums greatly in excess of the amount we are talking about to buy old properties, obtain mortgages and improve them, which is a far more expensive way of improving accommodation for council tenants than the one which the council has proposed. It must be more economical to prolong the life of properties which are falling into disrepair than to build anew. For example, for the cost overall of this modernisation scheme this year only 10 or 11 new houses could be built, whereas some 23 could be modernised for the same sum. On top of this with the modernisation programme, additional accommodation would be provided, because in several cases the larger houses could be converted into two flats and thus relieve the pressure on the housing list.

Many of those on the Alton waiting list are young families, or older families whose children have grown up and gone. Such applicants would find the accommodation which can be provided by converting a large council house into two flats perfectly satisfactory.

I now put some specific questions to the Minister. What justification can he give for arbitrarily cutting an allocation of funds, which will cause wasteful expenditure, inability to use resources already made available, and reaction from the general public that local government affairs are being badly mismanaged? What other councils have been left high and dry with accommodation available and ready, the whole public relations exercise carried out, and plans and tenders ready to start on such a scheme? Why must the Council bear all of the initial costs for a five-year programme in the first year's allocation of funds?

This means, with the whole of the £60,000 having to be set off against this year's grant, that only 10 houses can be improved, whereas if it could be spread over a longer period—which is perfectly logical, because the mobile homes will be earning their keep for three or four years—this would alleviate the situation somewhat. If the Minister could consider spreading the £60,000 over five years it would mean an increase, this year, of £48,000 in money available for improvement, which would allow the figure of 10 to rise to 20. Does the Minister not feel that this would be a fair way of spreading what has been an initially large capital cost over the five years that these mobile homes will be used for temporary accommodation?

Last, but not least, the members and officers of the East Hampshire District Council were angered and dismayed at the high-handed way in which their request for an interview with the Minister was refused. Subject to what the Minister may be able to say now which may give us some reassurance, I trust that when I ask to bring a deputation to him—as I shall—it will not be as arrogantly refused as it was in the letter from his Department to the council's chief executive on 3rd July in which it was said that Ministers were too busy to see chief officers of local authorities with their Member of Parliament.

The members and officers of the district council feel that they have been given a raw deal by the Government. I feel that what I have told the House today shows a careless disregard for the proper management of public funds, in that the cuts proposed waste money already spent and will inevitably mean higher estimates in spending when eventually these improvements can be carried out. I hope that in his reply the Minister can give me and my constituents some comfort.

3.12 p.m.

The Under-Secretary of State for the Environment (Mr. Ernest Armstrong)

I am grateful to the hon. Member for Petersfield (Mr. Mates) who has raised a subject that is of importance to his constituency and of general interest throughout the country. I shall read carefully what he said and take up the strong allegations he made. I am anxious to retain good relationships with local authorities because they and the Government are in partnership in dealing with this serious social problem. The hon. Gentleman raised a subject which is of great concern to many constituencies and local authority districts throughout the country.

It is important to consider the question of council house improvements in its full context. I shall come to the particular circumstances the hon. Gentleman has raised and I hope that I shall be able to give him some reassurance this afternoon. We can, however, have further discussions together if the hon. Gentleman thinks that that is necessary.

I hope that the hon. Gentleman will forgive me if I begin by explaining the policy background to the new control system of capital allocations introduced as from 1st April this year. I shall then go on to deal, as best I can, with some of the specific problems he has raised.

It is always a source of some consternation to me to discover how apparently misleading is the information available to Government Departments on matters over which they are supposed to exercise some influence or control. Certainly many of the difficulties that have arisen over the operation of Section 105 of the Housing Act 1974 during this initial year of the new system—and I do not minimise them—result from the hazards of assessing and fully understanding the nature of the problems associated with the physical state of council-owned dwellings.

Our starting point was the 1971 National House Condition Survey of of England and Wales which indicated that at that time there were under a million dwellings in council ownership which lacked at least one standard amenity. It was also estimated that there were about 100,000 council dwellings—probably largely included among the half million already mentioned—which needed at least £500 worth of repairs. These figures were broadly confirmed by the 1971 Census which indicated that there were 383,000 households in public-sector dwellings in England and Wales—that is, housed by local authorities or the new towns—which lacked the exclusive use of at least one basic amenity.

From 1971 to 1974 inclusive, improvements to no fewer than 360,000 council dwellings were approved by my Department and the Welsh Office. One would have thought that this amount of activity—which was, incidentally, an all-time record—would have produced a very significant drop in the number of council houses needing attention.

However, when the Department examined the results of its questionnaire issued in January of this year to all local authorities in England, we were very surprised to discover that there are apparently about 445,000 council-owned dwellings which are still without standard amenities. This clearly indicates either that the local authority returns are not to be relied upon or that the improvements that have been undertaken since 1971 have not benefited the most needy council tenants.

The latter assumption seems to me to be the more likely, and, indeed, a good indication of the way in which priorities have been allowed to become a little distorted can be seen from the fact that of the 155,000 dwellings on which the authorities wanted to start improvement work this year, only 75,000 were without standard amenities.

These findings, among others that I shall touch upon in a moment, bear out the need for the more positive form of control over this programme that we introduced under Section 105 of the Housing Act 1974.

Let me emphasise that the Government did not lightly take the decision to introduce this provision. For many years local authorities have been free to determine for themselves how much to spend each year on house improvement, and in an ideal world this is obviously right. But the Government believe—a belief borne out by the figures I have just quoted—that over the past few years too large a proportion of the resources available for the improvement of the nation's older housing has been devoted to purpose-built, inter-war, council estates, many of which were already in a relatively satisfactory condition, certainly when compared with the bulk of the substandard houses remaining in the hands of private landlords. Perhaps I should remind the House that it is in the declining privately-rented sector that we find 60 per cent. of all our remaining statutory slums and 40 per cent. of all dwellings without standard amenities.

We, therefore, deliberately decided to adopt measures to control local authority improvement expenditure—measures which first appeared in the previous administration's Housing and Planning Bill and which are now to be found in Section 105.

The hon. Member will know that the bids for capital approvals received by the Department in January of this year totalled about £572 million, which greatly exceeded the amount of public expenditure available. I might point out that this sum not only covered the expenditure already contractually committed on improvement schemes—about £200 million worth of work—but also envisaged a substantial spend on new schemes of improvement to no fewer than 155,000 council dwellings. As this compares with a level of approvals running at below half that figure during 1974, the Government might be forgiven for believing that the bid for new projects was somewhat inflated. Indeed, new approvals for the first three months of this year—that is, before the Section 105 control was introduced—amounted to under 10,000 dwellings, equivalent to an annual rate of one-third of that envisaged in the local authorities' bids.

However, the available funds were allocated by the Department in February in accordance with the priorities enunciated by my hon. Friend, the Minister for Housing and Construction in reply to a Question on 23rd May from my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann)—that is, apart from existing commitments, to the improvement of sub-standard dwellings acquired from private owners; to work needed to bring empty dwellings back into use; and to the initial provision of standard amenities in purpose-built stock.

Of the £211 million—at 1974 survey prices—that we originally allocated throughout England, East Hampshire District Council received £114,000. This covered all that authority's committed expenditure, leaving £66,000 available for new work.

In the light of representations that were subsequently made by local authorities throughout the country, the Government recognised that the original allocations had presented many authorities with very real difficulties, not least because of the scale of their existing commitments in this the first year of the new arrangements. Consequently, the Government made a further £44 million available, bringing the total allocated to English authorities to around £255 million, an amount not far short of the record levels of spending on this programme achieved last year.

Details of how this additional tranche of Section 105 approvals have been allocated have today been set out in the Official Report, in response to a Question tabled earlier this week by the hon. Member for Petersfield. I am afraid, however, that it was not possible at the time for any of this additional money to be allocated to East Hampshire.

I know that this was a matter of considerable disappointment to the hon. Gentleman, but the hard facts of the matter are that despite the additional funds that have been found—at no small cost to those people who are now finding it more difficult to obtain mortgages as a result of the switch that we had to make from local authority lending—the sums available remain limited and cannot cover the cost of all the desirable work that local authorities rightly wish to undertake. I accept, moreover, that much of the work that East Hampshire District Council is keen to put in hand falls within the priority categories for this year that I enunciated earlier, but the available resources will not permit all such work to be carried out immediately. Some will inevitably have to be deferred.

The hon. Gentleman has described in particular the circumstances of the 47 houses at Alton which the council wants to retain in this year's modernisation programme. He will doubtless have a detailed knowledge of the present state of these dwellings. For my part, I have had a report on their condition. I know how strong the case is for carrying out improvements as quickly as resources permit.

But despite their conditions—attributable perhaps to the former authority's philosophy, which I trust has now been abandoned, of doing nothing to modernise housing for semi-rural tenants—we simply did not have sufficient capital resources at our disposal to meet this and many other equally deserving cases before us when we were deciding how to distribute the extra £44 million.

However, I am pleased to say that a very recent development enables me to alleviate the hon. Gentleman's concern. Another local authority in the region has just advised the Department that, for a variety of unforeseen circumstances, it will not be able to spend all the money that it has been allocated. This means that a small sum is now available for redistribution elsewhere, and I am able to advise the hon. Gentleman that we shall be getting in touch with East Hampshire District Council to tell it that it is now authorised to begin work as soon as it is able on the 47 dwellings concerned.

I am also aware of the seven empty houses which will be difficult to let in their present state. This is another example of the price that the new council is having to pay for the lack of action on the part of its predecessor authority in tackling council dwellings built so long ago. But the council already has an allocation of some £66,000 for new work, and I believe that it is planning to use this money to ensure that its empty houses are brought up to a decent standard and quickly let to those in need of rented accommodation in the area.

Similarly I regret that it has not yet been possible for the council to make use of the 12 mobile homes that have been purchased to enable tenants to be decanted from dwellings undergoing comprehensive renovation. I must point out to the hon. Gentleman that the authority does not have to charge the cost of mobile homes against its Section 105 allocation. The Department has not at any time led the authority to believe that it does have to do so. I am sure that in the happy circumstances which I have just outlined the £75,000 which the council has spent on these temporary homes will not prove abortive.

I am grateful to the hon. Gentleman for raising this matter. I hope that the district council will be able to overcome its remaining problems. Certainly we shall give it every consideration when we make the allocation for 1976–77.

3.25 p.m.

Mr. Hugh Rosed (Hornsey)

As there are a few moments left before the time allocated for the debate expires, I shall make one or two comments upon the present situation. First, I am grateful to my hon. Friend the Member for Peters-field (Mr. Mates) for raising this matter. He has raised it in the context of a constituency problem but has indicated that certain national problems must be faced. The Minister has made reference to those problems.

Given the present crisis, I understand the need for local authorities to restrict public expenditure. Clearly there is a need for priorities even in the most important matter of housing. It is regrettable that economies have to be sought. However, I wonder whether the priorities that are being sought are the right ones.

According to the information at my disposal, by the end of 1973 approvals for improvement grants were running at the rate of 453,000 per annum. In other words, 453,000 sub-standard homes were being brought up to modern conditions to provide decent houses for people in which to live. That was an allocation of public resources when existing sound houses were in being and when the minimum of expenditure was required to provide homes, in contra-distinction to a situation in which many more millions of pounds would have been required to build new homes in place of those already existing. Of the 453,000 homes that I have mentioned, some 188,000 were in public ownership. Improvement grants were directed to local authority housing. I understand that 179,000 approvals were attributed to housing associations, Owner-occupied houses and private landlord housing.

How has the situation deteriorated since the end of 1973? From the latest figures available, it appears that in the first two quarters of this year only 37,500 local authority improvement grants have been approved as against 188,000 in 1973. In the private sector only 50,000 have been approved. The Minister has told the House that there has been a redeployment of resources away from council housing improvements towards the more serious situation that exists in the private sector, but the approvals in that sector for the first two quarters of this year are only 50,000 as against three times that figure in 1973. It is clear from the figures that resources are not being deployed towards improvement grants. I think the truth of the matter must be that the resources are being deployed by the Government in pursuance of certain doctrinaire policies.

Mr. Armstrong

Oh!

Mr. Rossi

Yes. The money is being spent in municipalisation. That is a euphemism for the nationalisation of properties. The money is being used in rent subsidies for tenants who perhaps do not need as much help as tenants in the private sector.

Can the Minister give us up-to-date estimates of the spending on rent subsidies? Secondly, will he give us current estimates for renovation or improvement grants? Thirdly, will he give us the estimates of spending on municipalisation? Fourthly, will he give us the figures for new council house spending? If we are given those figures we shall be able to assess whether the Government have their priorities right.

I shall welcome having those figures, but we believe that it makes far more sense to bring up to a decent standard our existing stock of housing so that it does not become obsolescent. We believe that it is better to do that than to transfer houses from private ownership to public ownership at vast public expense without creating one new home for anyone. That is where we believe that priorities have gone wrong. I hope that the hon. Gentleman will be able to supply the figures for which I have asked.

Mr. Armstrong

I take exception to the hon. Member for Hornsey (Mr. Rossi) coming into the Chamber and asking detailed questions, thereby muscling in on an hon. Member's constituency concern. The hon. Gentleman knows that this is a matter of priorities. I have outlined the Government's policy. To make the assertion—it is an assertion that the hon. Member continually makes—that housing matters are all concerned with party politics indicates that he is not addressing himself to the serious social problems that we must consider when discussing housing.