HC Deb 15 January 1981 vol 996 cc1253-60

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

11.43 pm
Mr. Jim Craigen (Glasgow, Maryhill)

I asked for this debate because Glasgow's voluntary housing movement is facing serious problems. Some of the difficulties are common to all housing associations in Scotland, but several are more specific to Glasgow, where rehabilitation of the older tenemental properties represents the main thrust of housing association activity.

House building has reached a post-war low under this Government, with Government housing policies throttling local authority building and skewering the unique contribution of the Scottish Special Housing Association. Voluntary housing associations now represent the final hope in rehabilitating many inner city areas which must otherwise languish in slumdom.

According to the Scottish Office's own figures, one house in 10 in Glasgow is sub-standard. The problem is not entirely an urban one—a number of rural areas have an equally serious problem—but the proportion of housing stock in Glasgow that is below tolerable standard is twice the Scottish average. Fifteen thousand homes below tolerable standards in Glasgow are included in housing action areas, and about 10,000 of those have been acquired by housing associations for improvement. The housing associations have saved many of the city's tenemental properties from the bulldozer, and awakened hopes that were virtually dead among the local residents that something might be done after all to provide improved housing and better surroundings in areas that they know.

In a little under a decade, Glasgow's rehabilitation programme has become the largest in Europe. Much of this progress was made possible by the 1974 housing legislation and the efforts of the community-based housing associations, which are approved by the Housing Corporation. Perhaps no new housing associations should be established, because the existing ones are already competing for a diminishing cake.

The 1977 Green Paper on housing in Scotland, which was almost bipartisan in its tone, recognised the growing role of community-based housing associations in housing action areas. It is generally recognised that the work of housing associations has been supported by all parties and that it is a non-partisan issue. However, resources are not non-partisan. Ministers in the present Administration have recently spoken enthusiastically about the voluntary contribution. Tonight, I want the Minister to back up those words in practical terms.

I understand that there was a feeling that, because the Secretary of State has partly lifted the moratorium that he imposed last November on tender approvals in Strathclyde, tonight's debate was not necessary. I have no doubt that the timing of the announcement coincided with the fact that this debate was called, because many building contractors have been waiting until 19 January for an announcement on what would happen to the building projects that were frozen last November. While 33 of the 42 projects in Strathclyde can go ahead with no expenditure commitments in the year 1980–81, a further nine, including two in my constituency, will require consultation with the Housing Corporation. Keeping properties empty and open to further deterioration hardly represents an economy. I wonder how much this moratorium will save the Government at the end of the day.

Let us take, for example, the frustrations experienced by the Maryhill housing association over the moratorium. The Minister will recall our meeting in Glasgow on 18 November 1980, when I led a deputation to see him about the rehabilitation of 1839 Maryhill Road. For its part, Glasgow district council came forward in respect of environmental work, and I feel that the Minister will not wish to go back on the assurances that he gave me and the the deputation that day. Again, five closes on which a great deal of work and negotiation has been carried out at 7 Lochburn Road and 1490–1534 Maryhill Road have been caught up in the moratorium. Those delays stand in the way of builders getting on with the job and people moving back into new and better homes.

Today, the Minister informed me in a written answer that 31,357 houses in Glasgow are below tolerable standard. Many more buildings would benefit from renovation, although we have to accept that some are beyond rescue. This week I received a letter from residents at 1070 Maryhill Road, and I have asked the district council in Glasgow to investigate. It says: Could you help us to find out what is to happen to our building. The three top flat houses are all leaking from the roof, in two of the flats the ceilings fell in a vast area, and one of the chimneys is dangerous. The Government frequently talk of a choice in housing, but diversity is a bigger issue. I think that the Minister will agree that the housing associations have been caring for many of those special needs that are otherwise overlooked—the needs of young couples, the elderly, particularly those requiring sheltered provision, the single person, the disabled, or the many on low incomes for whom house purchase is a sheer irrelevance.

A letter from an 30-year-old widower, Mr. E. Halleron, sent to the West of Scotland housing association, which has completed some sheltered housing provision in Gourley Street, in my constituency, puts it very well. The widower writes: It's really lovely and just the ticket for an 80-year-old pensioner". It shows the sense of appreciation of a new home at that time of life.

Glasgow district council's housing plan envisaged that 14,000 houses would be rehabilitated by 1983 and that by the mica–1980s the voluntary housing movement would overtake the traditional private rented sector in housing provision in the city. All this requires Government support, just as, I suggest, does the level of assistance given to owner-occupiers in terms of improvement grants where their homes form part of an improvement scheme.

What support will be forthcoming from the Government in the near future? I warn the Minister that there are dangers of bringing into question the credibility of housing associations with the people with whom they have to deal, including local residents and shop owners.

In respect of shops and commercial premises, I should like the Government to undertake a special study of the problems involved for housing associations and the difficulties arising for many shop owners and housing associations over rehabilitation in tenemental properties, which include shops and commercial premises. Glasgow, among all the Scottish cities, has the highest percentage of tenements built above shops, which many housing associations feel requires special legislation, and certainly additional grant aid to overcome the problems of common repairs and even the temporary closure of shops during periods of redevelopment. In the Possilpark area of my constituency this is an especially worrying problem for the Spring and Possilpark housing association. It is just one of many associations that are caught up in this difficulty.

I should also like the Scottish Office to examine the existing procedures for dealing with housing associations working on rehabilitation projects with a view to cutting out unnecessary bureaucracy and double scrutiny by both the Housing Corporation and the Scottish Development Department, because at the end of the day it adds to cost and frustration. The examination should include a realistic appraisal of existing cost limits, especially for projects involving the amalgamation or the integration of flats into bigger and more suitable housing units, so that bathrooms, kitchens or extra bedrooms are fitted in. Even after rehabilitation, many of these flats, as the Minister will know, have a small floor space compared with equivalent public sector housing provision.

Moreover, cutting corners now will be wasteful for the future. The BBC's "Money Programme" is sponsoring the construction of an energy saving house of the future. Some housing associations are having difficulties over their cost limits in respect of heating arrangements for the present. We should not be building houses for yesterday's energy requirements.

If aid is running out for the housing associations, time is certainly running out for many of the properties that they could rescue and for many of the local communities that they could hold together. The Government must not leave housing associations in the lurch at this crucial stage in their development.

I have spoken primarily about the problems of rehabilitation and the role of housing associations in inner city regeneration. There are also many new-build projects in which housing associations are fully involved. Perhaps that form of activity is more evident in the east of Scotland, in which my hon. Friend the Member for Edinburgh, Central (Mr. Cook) has a particular interest. Indeed, he has asked me whether he might say a few words in the debate.

I shall ensure that the Minister is under no illusion as to the answers I seek. First, I want to know what is happening about the left-overs caught up with the moratorium. I refer particularly to the two in my constituency. Secondly, I want to know about the future funding available to housing associations. Thirdly, what will the Minister do about the cost limits, particularly in respect of the integration or amalgamation of flats, and the vexed issue of double scrutiny? Fourthly, will he agree to a special study being made of the shops problem?

I am told that I might be pushing at an open door on that issue. However, I told the person who made the suggestion that it would be one of the few doors that this Government have opened.

11.55 pm
Mr. Robin F. Cook (Edinburgh, Central)

I congratulate my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) on raising this vital issue and I thank him for giving me a brief opportunity to emphasise that the housing moratorium has had a grave impact on Edinburgh as well as on Glasgow.

Last November, the Minister had the privilege of opening a modernised tenement in my constituency. He may not have been aware that immediately round the corner from that tenement was another tenement. The same housing association had invited tenders for modernisation for that tenement. As a result of the Minister's moratorium—which was imposed suddenly and without warning—that same housing association had to ring round to the contractors and request them to return the tendered documents.

That tenement still lies empty, derelict and mouldering. The cost of modernisation will eventually be higher, not simply because of inflationary pressures but because of decay to the fabric during the interim period. As my hon. Friend said, a convenient statement has been made today. It does not lift the moratorium. It merely allows housing associations to commit in advance the money that they will receive in the next financial year. That will only compound the financial pressures on the budget that they will inherit the following year.

Those pressures would be intense anyway. As the Minister knows, the total budget for housing associations next year will be £69 million. However, the housing associations estimate that they will require £150 million to meet their programmes. The responsibility for the resulting crisis will rest squarely with St. Andrew's House. Over the years it has encouraged housing associations to acquire substandard tenements, yet it is now denying them the resources they need in order to carry out modernisation. As a result, housing associations will find themselves trapped in the position of being slum landlords, and thousands of residents—both tenants and owneroccupiers—will find themselves cheated of the modernisation that they had been promised.

It is perverse that we should have a housing moratorium when one in every four construction workers in Scotland is unemployed. Future generations will regard with bewilderment the economic policies of a Government who stop the housing work that is desperately needed when the skilled resources to complete the job are standing idle.

11.58 pm
The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)

I congratulate the hon. Member for Glasgow, Maryhill (Mr. Craigen) on raising this debate, which has resulted not only from his natural interest in the housing associations' activities in his constituency but from his deep and long-lasting interest in the housing association movement in Scotland in general and his chairmanship of the all-party housing association parliamentary group.

Much comment has been made about the funding of the housing association movement. Both the hon. Member for Maryhill and the hon. Member for Edinburgh, Central (Mr. Cook) might have made a fairer presentation if they had acknowledged two things. First, they could have acknowledged that in the current year the Government have given housing associations in Scotland greater resources than they have ever had before. They could have acknowledged also that for the current year the Scottish Federation of Housing Associations has recognised the important contribution that the Government have made. In one of its publications, the association stated on the front page in large capital letters that the Government had kept their promise to the housing association movement in Scotland. If an objective overall picture affecting the housing association movement in Scotland had been presented to the House this evening, there would have been some reference to those facts.

At a time of sharply reducing public expenditure, which has had a dramatic effect on housing expenditure, the housing association movement in Scotland has to a large extent, by the deliberate decision of the Government, been protected from that problem in comparison with other housing authorities and other areas of public expenditure. For the two hon. Gentlemen to make the remarks they have without referring to that fact, without acknowledgment of or even passing comment on it, shows a very one-sided and prejudiced outlook on the whole issue.

Mr. Craigen

Is the Minister suggesting that the housing associations should be grateful that they have not been treated more harshly—in the way that he has treated the local authorities and the Scottish Special Housing Association?

Mr. Rifkind

I am saying that if the hon. Gentleman had wished to give a fair and objective assessment of the position of the housing association movement and of the Government's attitude to it, he might have referred to the facts I have mentioned.

I also take this opportunity—I am sure that I have the support of both hon. Gentlemen in this—to congratulate the Housing Corporation on its difficult task, being as it is the intermediary between the Government and a large number of individual housing associations, each with its own characteristics, its own identity and its own different problems and requirements. I am sure that I speak for other hon. Members in welcoming Mr. Gordon Muir, the new chairman of the Scottish committee of the Housing Corporation, who, with his long and detailed experience of housing matters in Scotland, will have a distinct contribution to make.

I turn next to the question of the moratorium, and I must correct a point made by the hon. Member for Edinburgh, Central. He suggested that one of the immediate effects of the Government's moratorium, which I announced in November, was the various harmful consequences for certain housing associations in Edinburgh. That is not the case. Before the Government announced any moratorium, the Housing Corporation, without any request or instruction from the Government, had ceased making new contracts in the east of Scotland. The effect of the Government's moratorium was solely applied to the Strathclyde area, which was the only area in which at that time the Housing Corporation was continuing to place contracts. The' hon. Gentleman was incorrect in his cause and effect.

As both hon. Gentlemen have indicated, an announcement has been made today. That was not a coincidence because of the debate this evening. The hon. Member for Maryhill will recollect that when we were both at a forum in Glasgow I said that the housing moratorium would continue at least until the end of the year, after which there would be a review. I said that an announcement would be made in January. That is why the announcement is being made early in January. It was a date I indicated some time ago. It did not arise out of the debate.

The need for the moratorium arose because, on the information that the Housing Corporation had submitted to my Department, there was a serious likelihood that its cash limit of £63.5 million, the largest it had ever had, would be breached if tenders for housing association developments continued to be let through the remaining months of 1980–81. I do not wish to ascribe blame to the corporation in this matter, since I believe that it has exercised commendable prudence in the management of the programme of housing association developments in order to stay within its cash limit for the provision of loans to associations.

Two factors, however, made it essential in our view that the moratorium should be imposed last November. The first was our conclusion that the corporation could not be exempt from the wider measures in which we were then engaged in our concern to contain the risk of over-expenditure on cash-limited funds. More particularly, however, there was a clear possibility of over-expenditure on the corporation's own allocation, as I have indicated, in respect of tenders let by its own Edinburgh office. Thus, the Secretary of State's moratorium only did for new projects in the Strathclyde region what the corporation itself had already done for similar projects elsewhere in Scotland.

I accept that there was some feeling on the corporation's part that the measures taken in November were stringent and that, left to itself, it would have been able to adjust its programme to keep within the cash limit for the year as a whole. Whether this would have been the case cannot now be known, but, as it has happened, the fears which I expressed to the corporation's chairman at the time regarding possible escalation of expenditure seem to have been borne out—due, no doubt, in part at least, to events which were unable to be predicted with certainty at that stage.

As hon. Members will know, the rate of expenditure incurred during the working through of a building contract is particularly difficult to predict, due to what is termed the slippage factor. At one extreme, adverse weather or other difficulties can induce slippage in the progress of a scheme and, hence, the rate at which instalment payments are earned. At the other extreme—this seems to be what has happened on this occasion—progress can be faster than originally anticipated, so that planned payments are liable to be exceeded in any given period of time. The likelihood of an overspend which was identified in November has become more evident in the information now available.

We are entering the last 10 weeks or so of the present financial year, and the need for continuation of the moratorium has been carefully reviewed against this fact. The Government are most anxious not to continue the present moratorium on the letting of contracts any longer than is absolutely necessary. On the other hand, given the volume of existing commitments against the balance of the corporation's cash limit, I am clear that it has become essential for it to avoid any expenditure against the cash limit before 1 April if that expenditure is unnecessary.

At a meeting yesterday with the corporation's chairman and the chairman of its Scottish committee, I indicated that I was prepared to end the moratorium and to allow the resumption of the letting of contracts on the very clear understanding that none of these would result in the making of payments during the remainder of the current financial year. I have since learnt from the chairman that he has put arrangements in hand for the letting of contracts subject to the particular restriction I have described. The effect of the Government's lifting of the moratorium has been substantial. Of the 42 outstanding tenders, no fewer than 33 can now proceed. Regarding the other contracts to which the hon. Member for Maryhill referred, there will be discussions between the individual housing associations and the Housing Corporation to see what might be arranged to enable an early start to these tenders. In some cases there may be a continuing delay, but that should not last for more than a few weeks at most, which we hope will minimise the inconvenience and problems for the associations concerned.

All the associations involved at present are Glasgow-based. It is, therefore, fortunate that we are able to indicate to the Housing Corporation that as a result of the lifting of the moratorium a substantial number of contracts in the city of Glasgow will now be able to proceed, as the hon. Gentleman was clearly hoping to anticipate. The hon. Member for Maryhill raised the particular problem of rehabilitation schemes that include a shop or several shops in the property that is to be rehabilitated and the particular difficulty that owners of shops are not entitled to improvement grants or grants towards the rehabilitation of the property. As he is, I am sure, aware, there is a statutory restriction in that the various statutory provisions that enable grants to be paid refer only to housing rehabilitation. Because shops do not fall under the housing category it is not possible under the existing statute for shops to be included in this provision.

The Government are conscious of the problems that can be caused, particularly for small businesses and for shopkeepers in small properties which, because of the part of the city in which they are located, do not tend normally to be particularly prosperous establishments. The owners often do not have substantial means with which to pay for improvements carried out to the block of property in which they are situated.

Some local authorities, particularly Glasgow district council, have provided loan assistance to shopkeepers to enable them to make a contribution towards the cost of improvements. It would appear that this has been of some assistance in those areas.

The hon. Member for Maryhill made the specific request to me that we should undertake a special study of the consequences of shops being excluded from entitlement to grant. I am happy to tell him that that is exactly what we intend to do. The GEAR management group, recognising the serious difficulties of dealing with the problem, has approved the mounting of a research proposal designed to define the problem, to examine previous successful solutions and to suggest alternative methods of approach.

The scope for action is necessarily limited by all the normal resource factors and, indeed, by the need for primary legislation, if there is to be any change. However, it is hoped that the research project—which, I may say, is being financed by the Scottish Office—will be completed within nine months of the date of formal approval. It is a matter that is in hand. It is sponsored within Glasgow by the GEAR project, it is being financed by the Government and we hope that it will produce some answers to exactly the sort of problems that the hon. Gentleman has quite correctly identified.

Another area in which the hon. Member called for action from the Government was in regard to the allegations that have often been made in the past about possible duplication in the control and supervision of projects that are being assessed by the Housing Corporation. He suggested that in many cases there appears to be duplication in that both the Scottish Office and the Housing Corporation become involved in considering and assessing the same information, thereby causing delay and frustration. He called on us to set up a committee to investigate the matter.

Mr. Craigen

Not a committee.

Mr. Rifkind

Well, I am not certain of the form of examination that the hon. Gentleman had in mind, but I am happy to inform him that, although it was a committee, the investigation took place some time ago. About a year ago, having discussed the matter with the Federation of Housing Associations, I set up a tripartite working party, involving the Scottish Office, the Housing Corporation and the Scottish Federation of Housing Associations. The three groups of officials got together with all the advice that they could muster and produced an agreed set of recommendations in order to help to deal with the problem. All the recommendations that they put forward have been accepted by the Government and have been or are in the course of being implemented.

We do not see that necessarily as the end of the affair. Clearly, if new ideas or proposals are brought forward by any party, we shall be happy to consider them constructively and with an open mind. We are anxious to help. Indeed, we took the initiative some time ago, and the fruits of that tripartite activity involving the housing associations have been significant improvements in the area.

In conclusion, I hope that the hon. Member for Maryhill will acknowledge that the cash position is not as grim as he suggested. The figure of £69 million given to the housing associations for next year is a very substantial sum indeed.

Mr. Cook

What about inflation?

Mr. Rifkind

One accepts that inflation modifies the value of the grant, but it is still a substantial sum. I do not believe that the hon. Member for Maryhill seriously expected a doubling of the resources for housing associations, whichever Government were in office. Therefore, I believe that an objective assessment would suggest that the housing associations are getting a very fair deal at present, and I am sure that most of them would accept that view.

Question put and agreed to.

Adjourned accordingly at thirteen minutes past Twelve o' clock.