§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]
8.26 pm§ Mr. Hal Miller (Bromsgrove and Redditch)In welcoming my hon Friend the Minister to this short debate on the problems of Redditch new town, may I say that I share with him the pleasure that the debate has come on at such a seasonable hour and with a much greater attendance in the Gallery, if not in the House, than one is normally accustomed to on such occasions.
This is the seventh anniversary of my first Adjournment debate, which concerned the problems of designation of a new town. I make no apology for reverting to the problems of new town development corporations and those of Redditch in particular on this occasion. Ever since I served on the Standing Committee which considered the New Towns (Amendment) Bill and subsequently spoke on Report and Third Reading from the Front Bench, I have been greatly exercised about the problems of the transfer of assets arising from the Act.
Indeed, following enactment. I raised with my hon. Friend's predecessor as far back as 1977 the problems with which we are still faced. Today they are much more acute than they were. They have been the subject of frequent correspondence between my hon. Friend and myself, as well as, I have no doubt, between my hon. Friend and the authorities involved. I refer to the development corporations, the district and county councils and—I must not fail to mention them—the staff associations.
Because it was not possible for my hon. Friend to give an answer to those outstanding problems, about a year ago a decision was taken to postpone the date of the transfer of housing assets from April 1981 to April 1982, and similarly to postpone by one year the wind-up of the development corporation itself. I regret to report that there has still been no resolution of the outstanding questions. I fear that it will be necessary for my hon. Friend to consider a further postponement, or some other measure. I shall come to that later.
There is an urgency about the matter because there is a real fear that the continued progress of Redditch, in all its aspects, will be seriously impeded. That is a matter of widespread public concern. I quote from a recent editorial in The Birmingham Post:
With time running short, there are too many questions left unanswered so far as the local councils, ratepayers and the employees of the Development Corporation are concerned. Only an early Government statement, followed by prompt action, can remove the doubts and fears.The questions that remain unanswered concern the transfer of housing assets, the community-related assets, the industrial and commercial assets, and the real problems for the staff involved. I shall attempt to treat those matters by reference to the district council, the county council, the development corporation and then the staff. In considering these matters I do not want to overlook the contribution made to the development of Redditch by the residents and those with businesses and professional practices in the town. We are sometimes inclined to overlook the fact that, however much we try. in our efforts here, and whatever the efforts of the local authorities in their planning, the final achievement of success inevitably depends on the residents themselves.947 I turn to the problems facing the Redditch district council. They centre mainly on the transfer of housing assets. I use the word "assets" in inverted commas because the district council has come to consider them as liabilities, having heard horror stories about defects found in first generation housing stock about to be transferred. Having looked at the housing estates in Redditch I do not entirely agree with that description. Of the 7,000 houses involved I should be surprised if more than a small percentage were found to have serious defects. However, it is a matter of real concern for the district council. As a prudent authority, with a still slender budget, it is naturally concerned about the means available to cope with any unacceptable problems.
I want to emphasise that the district council's fear that it may come across unexpected defects is the reason why it has asked for help to conduct a survey of the state of the housing stock to be transferred. The main problem arises from the size of the present subsidy. Because so many of the corporation houses have been built recently, they are standing in the books at a much higher cost than the average council property. Therefore, a greater subsidy is presently paid by the Government. The argument centres on the financial arrangements that should be made to protect the ratepayers of Redditch from any sudden levy or additional charge as a consequence of the transfer.
The total additional cost has been estimated by the district council as amounting to as much as 16p on the rates. That may prove to be an exaggerated concern, but it illustrates why the council is so concerned. There was a great deal of discussion about the matter during Committee Stage of the New Towns (Amendment) Act 1976. It is the reason why section 10 found itself in the original Bill, and was discussed at great length during its passage through the House. But there is still no firm indication on that matter. I shall revert to this point later.
Still on the subject of housing assets, there remain the staff, to whom I shall return under the corporation heading. There is uncertainty among the council staff as to how the joint staff will operate and when appointments can be made to the new organisation.
On the subject of community-related assets, again, severe financial penalties are feared by the district council—with good reason. There is a generous provision for parks. For example, generous landscaping and planting of open areas has been undertaken by the corporation on the basis of Government funds. These include amenities far more generous than the district council could have envisaged for its inhabitants. There is concern as to how these amenities are to be maintained in their present excellent shape.
There is a fear of further burdens. I refer to a recent report from the Health and Safety Executive to the district council requiring in one of the parks the provision of a shelter for park attendants with separate lavatory facilities for both sexes, including facilities for washing, changing and drying of clothes. Previously, in the event of heavy rain, a quick return to the depot had been adequate. Now these facilities are to be provided in the park. The mind boggles when one thinks of the provision which may be required in the Arrow Valley park once that is handed over to the district council.
The district council is of the opinion that some of the industrial and commercial assets should accrue to the 948 council to provide an asset base for its future operations. I do not share that view. We had a discussion on this matter on the Stevenage Development Authority Bill. I share the Government's view on that aspect, but I thought it only right to mention that the district council has a strong view on the subject and wishes representations to be made, and I am willing to make them.
The final matter concerns the arrangements for the rate support grant in view of the increasing work load that the district council is having to undertake to negotiate all these transfer arrangements. My hon. Friend has been struggling nobly to make progress on these outstanding questions. I understand that he put forward new proposals to the Association of District Councils in a letter dated 21 January and held a discussion with representatives as recently as 19 February. However, I have been asked to point out that the district council still has considerable reservations about my hon. Friend's proposals.
The council is concerned about the precedent set in respect of first generation new towns. Redditch is a second generation new town. Certain defects have been excluded from the investigations by the consultants appointed by the Government—the National Building Agency. It is still not clear about the financial basis on which reimbursement will be made for defects ultimately accepted as ranking for grant. There is a lack of clarity regarding the way in which provision for remedial works will be included in the housing improvement programme allocations.
More importantly, the council fears that future subsidies relating to the transfer of the dwellings will be subject to review on a year-on-year basis, whereas the discussion in Committee on the New Towns (Amendment) Bill referred to a tapering grant about the level of which there would be some certainty during the period that it was in force. That is an important concern for the district council.
The council also alludes to houses which are in such a bad condition that demolition should be considered, but I doubt whether that would apply to Redditch. However, it is trying to say that until the first generation disputes are settled, second generation towns are unlikely to agree to take on the transfer on a trust basis.
I have referred to the differences in levels of subsidy between council and corporation housing stock. That is why the council considers that such a specific formula is necessary in section 10 of the New Towns (Amendment) Act. There are real difficulties. Although my hon. Friend is making a strong and urgent attempt to solve the problems, there are still fears, as I have attempted to show.
The district council is concerned about the block grant formula. Apart from the work involved in negotiating the transfer provisions—which has extended over many years, as I have said—the council must also provide services in advance, over and above the immediate requirements which would otherwise be justified by the population. That is the principle on which infrastructure is provided in a new town by the develoment corporation. The council has therefore incurred higher expenditure than it would otherwise have done.
As in all matters affecting grants in such a rapidly growing area of population, the basis for calculating the grant never keeps up with the population growth. The council believes that more serious attempts should be made to obtain up-to-date population figures. That applies even more to other areas, such as that of the health provision.
949 The council is concerned that its target for reduced expenditure under the block grant formula is irrelevant, or, at least, does not reflect the growth with which it is faced. It has asked me to place great emphasis on the provisions for adjusting, at the end of the year, expenditure which has been incurred.
The county council is involved in social development, including social facilities, such as meeting rooms, and as the highway authority. There is an excellent system of social development officers who help new town residents settle into their surroundings. They have been particularly helpful in the development of residents' associations, which give a forum for expression of local energy, initiative and local opinion. I pay tribute to the work of those residents' associations.
However, those associations have been maintained with grants from the corporation, which the county council will not be funded to provide. The same is true of the work of the social development officers. The county council's social services department has been placed under the greatest strain by the fast growth of the new town. I shall not go into detail on that matter tonight, as I referred to it in an earlier speech. The development corporation's standard of landscaping and care of verges on the highways are greatly different from those of the county council. The highway authority will face an increased burden of maintenance for which there will be no recompense.
The development corporation is due to transfer its housing assets by April and to wind up by the end of September. It is still completing its plan of development, which is a considerable task. There are 480 houses for rent still to be let and 51 sites to prepare for a total of 2,000 houses for sale, as well as 26,000 square metres of land for industry and 9,400 square metres of office space. A real development programme is still being executed, with diminished staff and lowered morale.
The corporation's problems with the transfer of the houses are a mirror image of those of the council, but it has also been charged by the Department with the realisation of commercial and industrial assets. It was already engaged in a substantial programme of disposal of assets long before this Government came to power, but that was on the basis of disposal while retaining a proportion of the equity and the management function. It found that that was the most efficient, profitable and successful way of disposing of those assets.
There is now a concern about to which authority the rump of holdings and the management function should be transferred. I know that there is a doctrinal disagreement here, in that the Minister thinks that all the assets should be disposed of. Whatever view one may take of that, current leaseholders are reluctant in present economic circumstances to transfer their holdings into freehold, and the institutions are showing little enthusiasm for taking on a management function which, up to now, has been performed so economically and efficiently, particularly in the town centre. The corporation has a real problem in this respect.
There is also a staff problem. The staff are not only continuing the development function, as I have said, but now have a much more active management role as well as a role in disposing of the assets. At 31 January this year, the corporation had 332 staff in post. One suggested solution to the problem of the transfer of the housing to meet the Government's present deadline is an agency 950 arrangement. I am glad to see that my hon. Friend welcomed such a possibility, but he stipulated that the arrangement should terminate before the dates presently set for transfer and wind-up.
This presents a difficulty. I doubt whether the arrangements can be completed in the time available for the transfer, so there seems to be little point in concluding an agency agreement, despite the fact that a great deal of work has been put into it by the staffs of the corporation and the council. My hon. Friend has said that he would see little point in such an arrangement being concluded if agreement could not be reached by July of this year. I have to tell him that there is considerable doubt whether that date can be met.
One of the problems is that the redundancy terms for the corporation staff are different under an agency agreement from what they are under a straight transfer where the housing-related staff would qualify for the so-called Crombie terms. As it is understood, these terms are not available under the agency arrangement.
There is further confusion as to exact grades of staff covered by the Crombie terms because the term, "housing-related staff", is something of a term of art and would seem to exclude many grades that are actively concerned with housing while including some which, to most normal officers, would not appear to be related to housing. There is a need for my hon. Friend to re-examine the exact scope of those terms. This is having a very bad effect on staff morale at a time when their burden of work has increased enormously. This is one of the problems which I have welcomed the opportunity of raising in this debate.
I emphasise that all is not doom and gloom in Redditch by any means. There is considerable achievement in Redditch new town. I have paid tribute to those who have made this possible—the authorities, the residents and the businesses. What I am seeking from my hon. Friend is some assurances. First, if a decision on the terms of transfer of the housing assets cannot be reached soon—I have emphasised that the subsidy arrangements are not thought to be suitable as a replacement for the section 10 arrangements envisaged under the Act—he should either postpone once more by 12 months the target dates or allow an agency agreement to continue after the wind-up of the corporation under the aegis of whatever successor body takes over, whether it is a new town corporation or his Department, if that is legally possible.
Secondly, there should be early decisions about the successor body to hold the rump of the industrial and commercial assets and about the management functions in respect of those assets which are now of considerable value. It would be a great mistake to give rise to uncertainty and perhaps loss of value in those assets because of continuing indecision. Thirdly, there should be some adjustment to the block grant arrangements for the district council grant after the year end in the light of the arrangements promulgated at the time. Fourthly and lastly, the position of the staff should be looked into, both under the agency agreement and as to the coverage of the housing-related staff.
§ The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg)I am grateful to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) for the very constructive way in which he raised this matter, for the care that he took in presenting to the House the four 951 strands of the problem that he sees in Redditch, and for conveying one or two of the issues about which the district council is concerned, although I noted that my hon. Friend did not necessarily, as he said, accept some of the reasoning that the district council had used. I know that many district councils that have new towns within their boundaries are somewhat apprehensive of what may happen when their new town development corporation is wound up. I know, too, that the staff of those development corporations are concerned about their future, and that uncertainty can be unsettling. But change is a natural and, I suggest, inevitable feature of life, and it should not be regretted.
Before I reply in detail to the points that my hon. Friend has made I should like to make two points—one about new towns in general and one specifically about Redditch.
We have every right to be proud of our new towns. Development corporations and their skilled and enthusiastic staffs have created in England 21 new towns—all different, and all delightful places. I have had the privilege of seeing them all on more than one occasion. But we believe very strongly that when the physical development has reached a certain stage—I shall not say "been completed", because no town is ever completed—new towns must become normal towns. That means that the private sector should play its full part in owning industrial and commercial property, as it does elsewhere.
I am glad that my hon. Friend made the very important point that in the end what new towns are all about is people. That is frequently overlooked by too many Government Departments. I am glad that my hon. Friend reminded us that people are the beginning and end of why all of us are even here.
This also means that people living there should have the same opportunities to own their own homes as people living in other towns, whether by buying the houses that they rent or by buying houses built by a private developer. It means also that the county and district councils should assume the full range of responsibilities that they have elsewhere and should maintain the level of services that they and their ratepayers think is right.
Redditch, like all new towns, is an attractive place. Unlike some new towns, its attractions are not entirely the work of the development corporation. Its town centre has been enlarged. Here I pay particular tribute to the development corporation and its staff, because that enlargement has come from a most attractive existing town centre.
I am certain that even if Redditch had not been designated as a new town in 1964 it would have seen considerable new development over the past 15 years—new shops, new housing and new offices. I do not say that it would have grown to the size that it is today, but it would have grown and, with that growth, the responsibilities and the expenditure of the local authorities would have increased. The growth has been greater, I suggest, because Redditch is a new town, but that greater growth has meant greater rateable value. That must not be overlooked by the rating authority.
It may be convenient if I deal first with housing. The terms for housing transfer are set out in the New Towns (Amendment) Act 1976, which my hon. Friend, as a very diligent member of the Opposition, had the pleasure of helping to get on to the statute book. That Act provided 952 that where a district council takes over new town housing it is on the basis of the outstanding loan debt on that housing. What the district council, very rightly, wants to know is whether it will get any extra financial help towards the cost of taking over new town housing and whether, if the housing is in unsound condition, it will get help towards putting it right.
Let me deal first, very categorically, with the state of the houses. Unlike houses transferred to district councils in 1978, some of which were 25 years old, none of the houses built by Redditch development corporation is more than 13 or 14 years old. Officials of my Department have discussed with the development corporation whether any work is needed to put these houses into a structurally sound state before they are transferred. Some necessary work has been identified and is well under way. It is right that a prudent purchaser should satisfy himself that what he is buying is in sound condition, and I hope that the council is talking to the development corporation about the state of the houses.
I am informed that it would cost less than £50,000 to put the entire stock into perfect condition. Therefore, one should not exaggerate the problem, or in any way try to suggest that this has any relevance to the difficulties that the first generation has experienced.
I hope that Redditch is being realistic in its expectations about the state of houses that are not new. The market value of houses and flats now being sold by the development corporation ranges from £11,000 to £19,000. By the end of March 1982 the development corporation will have some 6,850 rented houses, and that average outstanding loan debt then will be about £11,500. By any standards, the council will be getting a bargain.
As my hon. Friend said, we have put proposals to the Association of District Councils which will mean that after transfer the district council's entitlement to housing subsidy will take account of both the extra reckonable expenditure resulting from transfer and the increased rent resources available. An allowance will also be made for any grant paid under the New Towns Act 1965 in the year preceding transfer to the development corporation towards its housing costs. Proposed detailed subsidy procedures for housing transfers between public bodies are set out in the "Outstanding Issues Consultation Paper", copies of which were placed in the Library last Friday.
It is our intention that the transfer of rented housing from development corporations should not place a major burden on the councils receiving the housing. That is not to say that the council may never be faced with the question of having to put up rents, or subsidise them from the rates as a result of viewing its enlarged housing stock as a whole. I realise, too, that the transfer of rented housing may well have implications for the rate support grant. We are now in touch with the associations about the rate support grant for future years and I hope that the local authorities will feed that point into the discussion.
I can sympathise with the council, which naturally wants to know where it stands. I understand that it is talking to the development corporation about the possibility of arrangements whereby the council would manage the development corporation's stock of rented houses before ownership is transferred to it. I very much hope that it will be possible very soon to achieve some such arrangement. It will enable the district council to get to grips with any problems that looking after a stock of over 11,000 houses, compared with its present stock of 953 about 4,200, might cause. It will also enable it to find out about and, I hope, reassure itself about, the state of the houses. It has nothing to lose and everything to gain.
My hon. Friend spoke about the morale of the development corporation staff. It is natural that some of them will see a future outside Redditch and will leave, although 1 understand that the number of staff who have so far left is not great. Uncertainty is not easy to live with, but, as I said earlier, it is sometimes unavoidable. I am sure that the district council will have this in mind when it is considering when to accept the transfer of housing. But I am certain that, even in this period of uncertainty, the staff of the development corporation will continue to give the same high quality service that they have always done.
§ Mr. Hal MillerDoes my hon. Friend realise that the final redundancy notices will have to be issued by the corporation in September this year, that a further batch will be issued on 1 March, and that a subsequent batch will be issued on 1 May? There have already been considerable redundancies, so it is very difficult for the staff to carry out the increased work programme with fewer staff and a continuing uncertainty as to what the future arrangements will be. My hon. Friend has not, perhaps, quite appreciated the length of the redundancy notices involved. That is why I was pressing him for a decision about the length of the programme or the target dates.
§ Mr. FinsbergI have, of course, realised the length of the notices involved, because this is not the first new town that we have dissolved. I know the various statutory periods that are involved. I can only say that, from the information available to me, it appears that staff are continuing to give a very high quality of service.
I now come to the question of the community-related assets. Some of these are leased by the development corporation to tenants—for example, club premises. We are considering whether, in these cases, the tenants should 954 be given the opportunity of acquiring the freehold. But others, such as parks—mentioned by my hon. Friend—are the sort of thing that are usually provided and held by local councils. We think that assets of this sort should pass to local authorities, and we are encouraging all development corporations—not just in the case of Redditch—to discuss this with their own local authorities. We shall need to do more thinking about terms and we accept the need to do it quickly.
I cannot accept—I am glad that my hon. Friend cannot either—that the commercial and industrial estates should be looked upon as assets that belong to the Redditch ratepayers. They were not created by the ratepayers and we think it is in the best interests of everyone that they should be privately owned.
Finally, I should like to say a word about standards. When the county and district councils assume in Redditch the full range of responsibilities that they have in other parts of their areas, it will be for them—I emphasise "for them"—to decide what standards they want to achieve. They will want to deploy their resources to the best possible advantage.
Where housing is concerned, one way for the district council to increase its own resources while, at the same time, lessening the calls on them, is to continue a vigorous sales policy.
I hope that this brief debate—at a civilised hour—will have gone some way to allaying the understandable anxieties of Redditch and will have answered some of the issues understandably in my hon. Friend's mind. I shall reflect very carefully on some of the detailed points that he has raised and bear those in mind when we are considering how best to take forward the dissolution in due course of Redditch new town.
§ Question put and agreed to.
§ Adjourned accordingly at seven minutes past Nine o'clock.