§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]
§ Mr. Ken Hargreaves (Hyndburn)In bringing to the attention of the House the housing problem in Hyndburn, I begin by acknowledging with gratitude the interest in and concern for these problems which the Government have shown while I have represented that constituency. Last year's housing investment programme allocation for Hyndburn was increased by 16 per cent. while other authorities had theirs reduced. The Minister for Housing and Construction visited Accrington and Oswaldtwistle in April and was most impressed with what he saw, especially the quadrangle scheme in the centre of Oswaldtwistle. On Thursday, we met the Minister to discuss our problems. No one can, therefore, accuse the Government of not being interested in our problems.
Last year's increase in HIP was welcome. We have had an increase of 54 per cent. during the past five years. Although 54 per cent. seems impressive, it is largely because we started from a low base. Nevertheless, we were grateful. I do not wish to give the impression that we are always moaning; rather I wish to set out the real worries of the council and its conscientious members. It has identified the problems and devised policies to solve them but is frustrated in so doing by a lack of resources. Not to draw the Government's attention to the position and its financial implications would be irresponsible.
I realise that the Government have made it a cornerstone of their policy to ensure that public expenditure does not consume too great a proportion of the nation's wealth. I support them in that, just as I support their policy to extend owner-occupation. Because I support it, I am asking for money to be spent now. It will give real value for money. The spending of relatively small amounts now will prevent the need to spend much larger sums at a later date.
We either improve our present substandard houses and thereby keep them in the private sector, or we allow them to deteriorate still further so that eventually they must be demolished and replaced by council houses at five times 508 the cost. It does not seem to make sense, on the one hand to pursue a policy of widening owner-occupation by selling council houses to tenants—Hyndburn borough council did it long before it was compulsory to do so—while, on the other hand, allowing existing owner-occupied properties to fall into disrepair, be demolished and replaced by council houses. That would not be in line with Government policy.
I ask the Minister to consider the case of an old lady who lives in one of Hyndburn's typical old terraced houses with no inside toilet or bath, which is in serious disrepair. There are thousands of such houses in Hyndburn. Consider also the implications for public spending of dealing with her problem. The council can improve her home through a grant at a cost to public funds of some £4,000. Alternatively, it can allow the house to deteriorate, eventually demolish it and rehouse her in a new council house at a cost of £20,000. The implications for public spending do not end there.
The old lady, now happily rehoused, will find that the rent on her new house is the average Hyndburn rent of £16 a week, which she cannot afford. She will therefore qualify for the average Hyndburn rebate of £11 for the next 20 years of her life. Whereas an improvement grant would have left her free from support from public funds, such funds now have to find £11,400 for 20 years—a total of £31,400. In other words it will cost almost £32,000 to rehouse an old lady in an area to which she does not want to go. For one eighth of that sum she could have remained in familiar surroundings.
What, then, can be done? Bearing in mind the Government's economic and housing policies, it seems necessary to find a way in which to concentrate spending on the small number of authorities with the worst pre-1919 owner-occupied houses — what we may designate as housing stress areas. The concept of such areas has no formal history as it has been invented by officers of Hyndburn borough council. It does, however, have obvious antecedents in inner urban area designation.
The main thrust of the Government's housing policy has been to promote owner-occupation by extending its availability to people in lower income groups. There are, however, a small number of areas in the country where high levels of owner-occupation have already been achieved due to the self-reliance and independence of the inhabitants and the way in which they have resisted the onslaught of municipal Socialism in housing. They take pride in owning their own home, and therefore in these areas the problem is not to promote owner-occupation, but to retain it. While the Government have concentrated on providing effective policies to promote new owner-occupation, they have, perhaps, understandably, not paid sufficient attention to the problems of boroughs such as Hyndburn with its 80 per cent. owner-occupied properties of which 40 per cent. are substandard and in need of major renovation. Policies such as the sale of council houses, low-cost home ownership schemes and the removal of restraints on private builders, important though they are in the national context, are of only minor relevance in Hyndburn where there are few council houses to sell. The availability of capital receipts from council house sales has been a major source of investment resource in many authorities with large numbers of high-priced council houses for sale. This, however, has not been Hyndburn's case. According to the generalised needs index, Hyndburn has 0.255 per cent. of the country's housing need, yet its 509 capital receipts as a percentage of the national figure are only one-tenth of that amount. Despite having the largest percentage of physically substandard properties in the country according to a recent Shelter survey, Hyndburn's HIP allocation, plus usable capital receipts was some 5 per cent. below the national per capita average—largely due to the very low potential for raising capital receipts. This clearly makes it more difficult for Hyndburn to tackle its housing problems.
I am not suggesting that the Government have not helped owner-occupiers — they have — with improvements in the grant system, and through sizeable increases in the amount of money for renovation grants in 1983–84 as opposed to 1978–79. Last year, local authorities were allowed to spend as much as they wished on renovation grants. Some authorities, of which Hyndburn was one, were not able to take full advantage of this because of the revenue costs of such spending and the effect it would have on rate support grant penalties. The increases in Hyndburn's housing expenditure since 1978–79 have added 5.4 per cent. to Hyndburn's total rate-borne expenditure, which means that Hyndburn would have had to make far greater cuts than other councils in other areas of expenditure if it was to reduce its expenditure to target levels.
A further reason for the difficulties which Hyndburn and similar areas face is the GREA system itself, where indicators used to measure the need for revenue expenditure are biased towards the needs that are most associated with private renting and multi-occupation. Under the definition used in the 1981 census, sharing occurs only when there is no common living or sitting room and no common meals. Such sharing is rare in Hyndburn. Most people in shared accommodation in the borough live with relatives and share housekeeping. The 1981 census shows only 115 households in the borough living in shared accommodation. However, at the time of the census, there were 350 applications on the housing waiting list describing themselves as living in shared accommodation, usually with relations, from which they wished to be rehoused.
Hyndburn would argue that on this basis its housing needs are heavily underscored. For example, a single parent with a child living with one set of parents, and perhaps her brother or sister, in a two-bedroomed owner-occupied terrace house would not score any GREA points unless the accommodation lacked a basic amenity. However, if the same size house were split into four bed-sitting rooms with a shared bathroom and inside toilet, with a single parent living in one room and a single person in each of the others, those people, with the same physical housing conditions, would add three times as much to the authority's GREA as the people in the previous situation.
The result of this is that despite having the very high need for spending in the private sector, to which I have already referred, Hyndburn has a GREA for revenue spending on private sector housing which is only 1.5 per cent. above the national per capita average. The GREA is only about one-third of what the authority actually spends on trying to retain owner-occupation.
The Government are reviewing the grant system and are concerned to ensure that grants go only to houses that would not otherwise have been renovated. This is already occurring in Hyndburn. Resources are having to be concentrated on the areas of greatest need, which is why I suggested that the Government should similarly 510 concentrate their resources by declaring housing stress areas into which additional capital and revenue resources could be invested to help areas with the highest levels of owner-occupied properties that were substandard and in need of repair. Such designation would be wholly justified. Individuals who have invested into their homes their resources, which are limited because we are a low-wage area, need to be protected. They need grants to be made available to ensure that the inability of others living in the same terrace to afford to repair their properties unaided does not threaten the future viability of the whole row.
Government action is needed to prove to these people that there is a long-term future for low-income owner-occupation. Unless some way is found to provide additional help in Hyndburn it will be 30 years before all our owner-occupied households can enjoy basic amenities in properties free from major defects. Even on the unreasonable assumption that there will be no deterioration in the meantime and no improvements above basic standards, the average terraced properties, many still with Tippler toilets at the bottom of the yard, will have reached their 130th year before being brought up to adequate standards.
I believe that the thrifty, hard-working people of Hyndburn deserve better than that, and I urge the Government to accept my suggestions or to find other ways of helping Hyndburn and areas similar to it where help is not only needed but is appreciated and where resources are used wisely.
§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)The House is very grateful to my hon. Friend the Member for Hyndburn (Mr. Hargreaves) for the way that he has developed the case for more resources for his constituents living in Hyndburn. He brought a deputation to my Department last Thursday, and I was extremely impressed by the responsible and well argued approach adopted by the councillors and officials whom I met and by the way that the case had been prepared in some documents which I found compelling reading.
What came through my meeting with my hon . Friend was the genuine concern of the councillors and the local Member for the housing problems that we still have to tackle in Hyndburn and the determination to tackle them without simply whining and demanding a share of increasing public resources which simply are not available.
The case that my hon. Friend has just put to the House was again very well argued. I was impressed by the cost-benefit analysis which he put forward, basically arguing that money spent on improvement grants now will ensure that it is not necessary to demolish buildings in a few years' time with all the financial cost and social disruption that would accompany wholesale demolition.
My hon. Friend also made the point that the Government's commitment to owner-occupation made it a safety net for those low income households who are owner-occupiers who may not be able to afford the substantial repairs that are necessary from time to time without the help of improvement grants.
My hon. Friend has been diligent. As I said, he led a deputation to my Department last week. He has initiated this debate this evening and I understand that he is seeing another Minister in my Department later this week to 511 develop the case for local government finance and the resources that go to Hyndburn through the rate support grant.
One has to address oneself to the particular issues facing Hyndburn. It came through at the meeting that the position there is unusual mainly because of the high proportion of owner-occupiers. I assure my hon. Friend that his concern is understood and shared by the Government, and I want to show how our policies are helping him and his colleagues in Hyndburn to tackle the issues that he has mentioned.
Although I have not visited Hyndburn, my hon. Friend the Minister for Housing and Construction did so at my hon. Friend's invitation in April, and I know from talking to him that that visit made a deep impression on him.
The sheer scale of the problems — in particular the long terraces of stone built houses with sagging walls and roofs, now at the end of their lives unless quick action is taken—was one part of the impression the visit made. Another was the ways in which action can be and is being taken.
My hon. Friend was particularly encouraged by the successful involvement of housing associations in rehabilitation of older housing which he saw at the Bradford and Northern Housing Association scheme at the Quadrangle, Oswaldtwistle, and with the efforts made and the continuing potential for private sector area improvement.
The north-east Lancashire towns have certain housing characteristics which mark them out from most other parts of the country. One of these, which I touched on a moment ago, is the traditionally high rate of home ownership. This is not surprising as the area was one of the cradles of the building society movement.
In Hyndburn's case there are some 27,000 privately owned dwellings — 84 per cent. of the total stock—which is way above the national average at 60 to 63 per cent. Equally characteristic is the large proportion of terraced houses, built before 1919.
In Accrington, many houses were built with stone facing, but rubble filled walls, a particular cause of instability and an expensive problem, where instability occurs, to put right.
The ready availability of older terraced housing has acted as a disincentive to new house building. When a terraced house can be bought improved for no more than £7,000 or unimproved for as little as £3,000 or less, the market for new houses at £16,000 is severely inhibited. My hon. Friend the Minister learned that at first hand from a developer who had been vigorously marketing two sites in the borough but where sales have been disappointing. "Low cost homes", in such an area, has a different meaning from the usual one. For someone like myself as a London Member used to London prices, the sort of figures that I have just been quoting seem remarkable.
The combination of a high percentage of owner-occupiers coupled with low house prices mark out Hyndburn as being somewhat unusual compared with other parts of the country.
The low house prices also have an effect on the value for money of carrying out housing improvement. It is far harder to make the economies of improvement stack up when the value added may be less than half the cost of doing the work.
512 Another problem for Hyndburn, which my hon. Friend the Member for Hyndburn and his councillors described on Thursday and which the Government fully recognise, is that the ability to generate capital receipts is limited. Hyndburn's stock of council houses was small to start with and I am aware that sales under the right to buy have not so far been as high as in other parts of the country.
I know that one of the issues that concerns the local authority is the absence of any adequate national arrangements which would take into account the ability of individual local authorities to finance investment from capital receipts. It is, however, the case that some account is taken of this fact. The reduction this year in the prescribed proportion of capital receipts which individual authorities could spend from 50 per cent. to 40 per cent. increased the amount of those receipts which were available for allocation centrally by my Department. This specific step was taken so that areas such as Hyndburn could benefit. I shall be returning to allocation later on.
I very much hope that the Housing and Building Control Act 1984 will help to stimulate home ownership through the right to buy and, in particular, that it will enable less well off people to get started in becoming owners of their homes. The Act has introduced increased discounts so that secure tenants of 30 years' standing now qualify for a 60 per cent. rather than 50 per cent. reduction; secure tenants now qualify to claim the right to buy after only two years instead of three years' tenancy; and there is an entitlement to buy on an equity sharing basis. Tenants of leasehold property have also had the right to buy extended to them—a significant fact in a number of parts of the north-west.
Our object in that legislation has been to bring home ownership within the reach of the largest number of people possible. We have also tried to ensure that tenants are aware of their statutory rights by a large scale distribution of literature direct to tenants' homes to advise them how they can go about exercising the right to buy.
On capital resources, my hon. Friend recognised that the overriding factor must be the amount that can be made available for housing nationally. The Government have repeatedly made it clear that they are determined that public expenditure should not consume too great a proportion of the nation's wealth, and public sector housing has had to make its contribution.
Looking at longer-term prospects that emerge from that strategy, the lower rate of inflation which Government policies have achieved should lead to a more stable housing environment, and one in which investment decisions can be made against a more secure background. Housing has of course in the past contributed to reductions in public expenditure. However, the HIP total for 1984–85 was increased by more than £50 million compared with the 1983–84 figure.
The borough council of Hyndburn received an allocation for 1984–85 of £3.675 million, which was an increase in cash terms of 16.1 per cent. on the 1983–4 allocation. That was a substantial increase—one of the largest in the north-west.
That allocation recognised the particular spending needs of the borough, not least the need for private sector improvement, which formed a large part of my hon. Friend's speech. Allocations are determined partly on the basis of the generalised needs index and partly at the discretion of the Department's regional office. The GNI is the best objective assessment of need that we have. It 513 is kept under regular review and is agreed annually with the local authority associations. Even so, it is not perfect and, in order to compensate for factors which are not easily measured or are peculiar to particular areas, regional offices may distribute a proportion of resources, 50 per cent. in 1984–5, according to their perception of need. In addition, authorities may add capital receipts to their allocation.
However, this year my right hon. Friend the Secretary of State had to ask authorities to restrain their capital spending in 1984–85 and, in particular, not to use receipts accumulated in previous years. Returns made by authorities had shown that, unless action was taken, a substantial overspending on the local authority capital expenditure cash limit would have been likely. That would have been in addition to the actual overspending in 1983–4.
Most authorities have complied with the request. Hyndburn, I understand, is one of them; and I should like the council to know how grateful we are for its cooperation. I know the difficult decisions that it has had to take in order to limit its spending.
In September, authorities were asked to continue to exercise restraint. This is not a moratorium; we do not believe that a moratorium would be justified in terms of the extra savings that it might produce. We shall keep the position under review in the light of authorities' expenditure returns.
My hon. Friend was worried that there might be a bias built into our allocation process in favour of districts that have inner urban area status. An inner area weighting is applied to the GNI scores and authorities that have this status. That is because the areas selected have particular concentrations of need, in housing as well as in other terms, which marks them out from other authorities. Of course, many authorities have problems in particular areas—sometimes even over quite large areas—which would match those of inner urban authorities. But it is the scale and the intensity of the problems in the latter case, as measured by the most objective means that we have, which has led to their selection for special help.
It has been a fundamental part of inner urban area policy that special help should not merely be available through the urban programme, but also through main programmes, including the housing investment programme. I assure my hon. Friend that the particular problems of his authority will continue to be taken into consideration when allocations are made. Looking at the figures for the current year, I see that Hyndburn has had a very substantial allocation under the traditional urban programme.
My hon. Friend referred to the difficulties facing the elderly. Hyndburn, in common with other areas in the north-west, has a relatively large number of elderly people and there is, therefore, a need for some degree of support to enable old people to lead as independent lives as they can for as long as possible. This may take the form of sheltered accommodation. Hyndburn's new housebuilding proposals for 1985–86 relate entirely to provision for the elderly. However, I would commend the research report by Dr. Anthea Tinker in my Department entitled "Staying at Home: Helping Elderly People". We sent copies to all 514 housing authorities as well as social services and health authorities on 16 October. The report examines in detail alternatives to sheltered housing or institutional care which enable the more dependent elderly to remain in their own homes. The evidence is that that is what most old people wish to do. Alarm and care schemes are often cheaper than sheltered housing. En addition to the alarm systems there must be adequate support services. The support of families and neighbours is thus extremely important. In Lancashire there is a tradition of neighbourliness and community support which has a crucial part to play in the care of the growing number of very elderly people. I hope that the council will look carefully at Dr. Tinker's report from the point of view both of the best interest of older residents and of making the best use of finite resources.
The renovation of privately-owned dwellings is particularly relevant to Hyndburn as some 84 per cent of its stock is privately owned. The higher grant rates and the inducement of additional allocations available under the indicative figure system were intended not only as a measure to help the building industry but also to encourage improvements in the private sector stock.
My hon. Friend mentioned improvement grants, and I was interested to hear what he said about Hyndburn's policy of trying to concentrate improvement grant resources on those who most needed them. He urged the Government to do likewise. A consultation paper on proposed changes is expected to be published shortly. A simplification of the system is certainly one of our main objectives, but another objective, which my hon. Friend touched on, is the securing of better value for money. I share the view that it is important to seek ways of targeting the resources towards the people and properties which most need them. I am sure that my hon. Friend and his local authority will find the proposals that we have to make of considerable interest. No doubt the authority will wish to ensure that the proposals that my hon. Friend has outlined for housing stress areas to be designated are included in its response to the consultation.
During the past two years, Hyndburn has been able to spend a considerable amount compared to previous years on improvements in the private sector—£1.6 million in 1982–83 and £1.8 million in 1983–84 when the borough council benefited from an additional retrospective allocation of nearly £250,000 under the indicative figure arrangements. The council has expressed concern about the revenue consequences of capital spending, not least in area improvement activity, which is staff intensive. That is something that my hon. Friend may wish to develop when he sees my colleague later this year.
I am grateful to my hon. Friend for the very positive and constructive way in which he has approached the housing problems of his constituents. They have good cause to thank him for putting their interests so clearly before us. When we make the allocations for Hyndburn later this year, we shall of course take his remarks fully into account and do what we can to tackle the problems that he has mentioned. We share with him a determination to make further progress.
§ Question put and agreed to.
§ Adjourned accordingly at, sixteen minutes to Eleven o'clock.