HC Deb 11 July 1985 vol 82 cc1374-82

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

11.32 pm
Mr. John Maples (Lewisham, West)

I apologise to you, Mr. Deputy Speaker, and to my hon. Friend the Minister for keeping you up late to discuss certain aspects of the housing problems in West Lewisham. My hon. Friend understands how important they are. From a previous incarnation as a Lambeth councillor, he will understand many of the problems in Lewisham. It is a fairly typical inner London borough which combines the leafy suburbs of the south with serious problems of urban decay and deprivation in the north. A lot of the housing is old, certainly pre-war, built in the 1930s, some of it in the 1940s and quite a lot of it even before 1919. We also have problems with multi-occupation estates and high-rise blocks built in the 1960s.

In the time available, I should like to look at the capital housing budget for the borough. The basic HIP allocation for Lewisham has fallen from £29 million in 1980–81 to just over £20 million this year — a fall in real terms of about a half. If one looks at the total capital spending, which includes receipts from sales and one or two other balancing items, one finds a similar picture. It has fallen from £32 million in 1980–81 to £30 million last year and £21.6 million this year — a fall of more than 50 per cent. over five years and of nearly one third from last year to this year.

The aspect to which I ask my hon. Friend to address himself is the biggest problem presented by the capital repairs and improvements needing to be done to many council properties in the 1960 estates-and pre-war houses. Reductions in the budget have meant that those essential works are not being done. To some extent, the position has been ameliorated by the proceeds from the sale of council houses. They contributed £5 million to Lewisham's capital expenditure last year, but this year the contribution will be only about £2 million, despite the fact that the council has about £8 million in the bank from sales in previous years.

There is no question but that Lewisham council has dragged is feet over the right to buy and has not been an enthusiastic seller. It is also fair to say that much of its remaining stock will not be sold without some inmaginative new initiatives on the part of the Government rather than on the part of the council and that the restrictions on being able to spend 20 per cent of those proceeds will remove what little incentive there is to a council like Lewisham to sell its properties.

I should like to spend a few minutes on the question of essential repair and improvement work that is not being done. The council in Lewisham owns about 43,000 houses and has sold about 2,000. I think that it would be fair to accept that for the foreseeable future it will remain a major landlord. It is therefore incumbent on it to keep its housing stock at a reasonable standard. It is in duty bound, surely, to protect the value of public assets by maintaining those values, to maximise its income from them and to reduce the number of difficult-to-let properties which arise, not always but sometimes, through a lack of capital expenditure. Essential work on both capital repairs and rehabilitation is being postponed. Roofs needing replacement or renewal, houses that have not been rewired for 50 years, and concrete cladding that is crumbling on tower blocks are all examples of capital repairs that need to be done. Rehabilitation accounts for some of the empty properties. More importantly, some of the environmental improvements to an estate can make it easier to let and maximise its income and can encourage people to buy their flats.

There are revenue consequences to these capital savings. The capital expenditure reductions appear to be a saving, but often the result of not doing a capital repair is that current repairs have to be done. If the roof is not replaced, it has to be patch repaired, perhaps once a year, until the capital repair is done. That costs money, and on top of that is the inescapable fact that if a capital repair is not done this year it will cost more to do it next year, and if it is postponed next year it will cost more to do it the year after. There are some false economies in what appears to be happening.

All of this also militates against the desire of tenants to buy their own property, because they are less likely to do so if the capital repairs that should be done are not being done. If they are asked to buy places that are in a bad condition, they are unlikely to do so, whereas if their estate has environmental improvements, or housing that has been brought up to standard, they are more likely to buy.

Lewisham has many houses that were built in the 1930s and 1940s, and many 1960s estates. A proper repair and improvement programme would maintain the value, maximise the income and facilitate sales of such estates.

In the owner-occupied sector, the picture on improvement grants is not encouraging. Although in this year's capital expenditure there is a provision of about £2 million for improvement grants, it was committed last year. Since then, 3,000 applications for discretionary grants have been turned down. The Government and their supporters rightly pride themselves on the enormous advance in the home improvement programme, but it is worth bearing in mind that one of the consequences of the Budget is that there will not be a single new discretionary grant this year.

The problem is even worse on some of the transferred GLC estates, because of the repairs that need doing to those and the consequences of the HIP allocation for the GLC. Lewisham compulsorily took on 13,400 GLC properties, one of the largest numbers. It did not want to do so, but it got them under a statutory instrument that was passed by the Government. It contained a repair and improvement guarantee by the GLC to put those properties at a certain standard by 1992.

The boroughs that took those properties did so without surveys, but relying on the guarantee, which was a major and vital element in the transfer. It is clear that the base of the financial arrangements for making the transfer was to be that no undue disadvantage should fall on the ratepayers or the tenants of the borough that was taking the properties. Surely it was implicit in the imposition of a guarantee such as the one imposed on the GLC by that statutory instrument that the GLC would financially be able to fulfil that commitment.

The GLC's renovation strategy for its properties identifies £1,000 million worth of work in the next seven years—about £140 million a year. This year, the GLC's HIP allocation is £67 million, and in Lewisham one can see the results of this in a repair programme that is clearly behind schedule. The stock that was taken over in Lewisham was worse than the average GLC stock. Urgent repair and health and safety work is being postponed.

Worse than that, some of the costs that should be falling on the GLC are falling on the borough's HIP allocation, because it has had to do emergency programme repairs that are not being done by the GLC. This year, the GLC will spend about £6 million on capital improvements in the borough, whereas it is clear that the figure needs to be nearer £12 million if that programme of improvements is to be fulfilled, and the guarantee redeemed by 1992.

Of the 1,605 GLC properties transferred to Lewisham in my constituency, 470 are on the Sydenham Hill estate. It is a well-situated estate in a nice area, is well landscaped and looks good from the outside. Five or six years ago, if one had asked the tenants what they thought of it, they would have said that it was a pretty nice place in which to live and work. However, as a result of the way that the estate was built in the 1960s, almost all of the fiats inside are miserably cold and damp in the winter.

People are living in cold, and unattractive conditions. Outside the crumbling cladding is dangerous for people walking below it. The GLC consultants identified £4 million worth of capital repairs that needed to be done to the concrete, heating, window frames and so on. The proposal for this year's spending is about £1.8 million—nearly half the sum.

In fact, the GLC will spend £100,000 on repairing the concrete and £75,000 on the heating, and the Lewisham council will make up the spending with another £200,000 which will enable central heating to be installed in 138—or just over a quarter—of the units. That is a total of £375,000 against £4 million worth of work which needs to be done.

Not only will tenants continue to suffer and have to put up with their cold, damp flats for another winter, but it will affect the possibility of selling the flats, the let-ability and the income to be derived from them. It will also affect revenue expenditure. In the long term, it will cost more to install central heating, to renew the windows and to deal with the falling concrete in two or three years' time when conditions are worse.

Tenants are worried about what will happen after the abolition of the GLC. We are told that the GLC's HIP allocation will be divided between the boroughs, but it is not yet clear upon what basis. It would be unfair to divide it on the basis of the general needs index, which is how the London HIP allocation is generally divided. Lewishani took nearly 10 per cent. of the GLC houses stock when it took 13,500, whereas Sutton took none. It would be unfair if Sutton received part of the GLC's HIP allocation.

The fair way is for the GLC's HIP allocation, whatever it is, to be allocated to those boroughs which took GLC stock specifically earmarked to fulfil the GLC's commitment. The current GLC HIP allocation will not be enough, however it is divided, to redeem that commitment to put the properties into a proper condition by 1992.

How will the residuary body's ability to generate capital be utilised? Will it have the power to utilise capital receipts to repair the properties by 1992? Will it be able to enter the equivalent of the GLC's HIP allocation, or will those capital receipts not be able to redeem that promise?

Capital spending on housing in Lewisham has fallen by 50 per cent. in real terms in the past five years. A major result is the postponement of major work. That has affected sales, let-ability, repair costs and the income from properties. Repairs will cost more in the future.

The GLC has special problems. The HIP allocation is not sufficient to redeem the promise made in the statutory instrument to put properties in a proper condition. Considerable problems might emerge from the abolition of the GLC and the reallocation of HIP money to the boroughs.

I cannot help concluding that once again current overruns have resulted in capital cuts. That is a false equation. The potponement of essential work is a false economy and will cost more.

11.39 pm
The Parliamentary Under-Secretary of State for the Environment (Sir George Young)

I am grateful to my hon. Friend the Member for Lewisham, West (Mr. Maples) for giving us the opportunity to discuss housing in West Lewisham. I know from correspondence how deep is his interest in housing. He has rightly raised a number of issues about his constituents, not least about the arrangements after the GLC is abolished on 1 April next year. This evening my hon. Friend gave a perceptive analysis of some of the issues, and I should like to respond to some of his anxieties.

I shall comment first on the general level of capital spending and the provision that we have made for capital expenditure by local authorities, which in the current year will be over £4 billion, a considerable sum by any standards. I need not re-emphasise to my hon. Friend the importance of the Government keeping within their overall figures, which are central to the Government's economic strategy. If expenditure were allowed to rise significantly above the level that I have outlined, pressure would be put on interest rates and there would be the risk of growth and investment in the private sector being impeded. In the long run nobody would be advantaged if there were any interruption to the recovery.

Within the figures, the initial housing investment programme allocations made to local authorities for the current year amounted to almost £1.6 billion, and London's share was almost £483 million. In addition to the initial housing investment programme allocations made for this year, those authorities which complied with our request for voluntary restraint on expenditure in 1984–85 are eligible for 5 per cent. supplementary allocations. On top of that, authorities facing particular difficulties because of the implications of the Housing Defects Act have been invited to make bids for supplementary allocations.

As my hon. Friend said, Lewisham's allocation for the current year is £20.3 million. It has made no application to us in connection with the Housing Defects Act, but it could be entitled to a 5 per cent. supplementary allocation when the final figures for 1984–85 are known. As my hon. Friend pointed out, Lewisham can supplement its HIP allocation through the use of the prescribed proportion of capital receipts. While this year we have had to reduce it to 20 per cent. generally, it is still possible for authorities to augment their allocations in that way by significant amounts.

There has been some misunderstanding about what that reduction has meant. I hope my hon. Friend recognises that we have not deprived local authorities of their capital receipts. We have simply spread the use of such receipts over a longer period.

Within the overall system, local authorities are free to determine their own capital programmes in accordance with local needs and priorities. Lewisham must, therefore, determine its 1985–86 programme in that way. I do not deny that the reduction in the prescribed proportion, and the allocation that Lewisham has, means that the council must take some difficult decisions about priorities. However, those are decisions which Lewisham is better able to take than are the Government.

One must move away from the idea that throwing public money at Lewisham's problems will solve the issues to which my hon. Friend referred. He displayed a keen interest in the idea of getting private sector finance to make faster progress in tackling the problems that he described, and any private finance is additional to the council's allocation.

The council can sell empty properties, either improved or unimproved, and it can initiate low-cost home ownership schemes. If existing council tenants are given access to such schemes, rented housing is then released for those who need it. My Department's urban housing renewal unit, which I shall describe more fully, will be happy to help.

It is crucial that Lewisham manages its stock properly. At the end of March 1984, Lewisham's rent arrears, of almost £6.75 million, represented 21 per cent. of the total rent collectable. In the last few years, not only has the council not increased its rents in line with increases recommended by the Department to take account of inflation, but it has not made any rent increases at all since 1982–83, although I understand that it has recently given notice that there will be a small increase from August. That means that the local authority has been denied resources of which other authorities in London have availed themselves.

From the point of view of other indicators of management competence, on 1 April 1984 Lewisham reported that of the 42,000 council-owned dwellings, 7,000 were difficult to let and 2,123 were empty, of which 637 had been empty for more than a year. I see in his place my hon. Friend the Member for Lewisham, East (Mr. Moymihan), who, I know, has serious reservations about the competence of Lewisham's housing department.

The number of empty properties —5 per cent. of the total stock — must be a source of concern, as is the number of properties empty for more than a year. Recently, my Department issued a circular to all local authorities giving detailed guidance on measures to reduce the numbers of their empty dwellings, and I hope that my hon. Friends will use what influence they have with the local authority to persuade it to adopt some of those initiatives. There has been a substantial increase over the previous year of properties in Lewisham which are difficult to let. The total now represents about one sixth of all the council-owned stock in the borough.

The Government are concerned about the growing number of difficult-to-manage estates in Lewisham and throughout the country. We are worried about rising rent arrears and the number of council houses standing empty. For that reason we have established recently within the Department the urban housing renewal unit to help local authorities tackle rundown estates. The problems of these estates are becoming increasingly varied and intractable and the unit, by drawing on the experience and expertise of local authorities, the housing services advisory unit, the priority estates projects and consultants, will be able to offer expert, independent and individual assessments of local authorities' difficult estates. The unit will be able also to suggest a package of measures to deal with them and seek to encourage a variety of different approaches, including disposals to the private sector and locally based estate management initiatives.

We have already made an approach to Lewisham suggesting a meeting with the unit. I hope that my hon. Friends will be able to persuade the council to respond positively and to put aside any political dogma in the interests of making real progress with the tenants whose interests both my hon. Friends represent. The unit will help the authorities to maximise private funding opportunities. In addition, it will be able to influence the direction of public sector resources where this proves to be necessary.

The figures that I have outlined of Lewisham's 42,000 stock show that 1,550 units were unfit, that 5,260 while fit lacked basic amenities and that 865 had amenities but needed renovation. This is serious. To get more detailed information on the condition of the housing stock generally and the expenditure that it is necessary to put it into good condition, my Department has written to all housing authorities. Lewisham has been unable to supply complete estimates, but the council has provided some useful information which we are processing along with information from other authorities. At a national level, this information will enable us to get a better understanding of the resources that are needed to tackle the renovation problem and will inform the continuing discussions about the public infrastructure. These discussions are taking place within the forum of the National Economic Development Council.

My hon. Friend the Member for Lewisham, West mentioned improvement grants and the policy adopted by Lewisham council. Local authorities are able to approve discretionary grants in such circumstances as they think fit. They have complete discretion in these matters. They can decide whether to make grants and, if they do so decide, at what rate they should be. At one time we understood that Lewisham was thinking of making no new discretionary grants in the current year. That would be regrettable, because, of almost 50,000 privately owned dwellings in the borough, over 5,000 are unfit, over 1,000 are fit but lack basic amenities and almost 11,000 are in need of renovation. I understand that the council has decided recently to introduce a small discretionary grant programme for special cases where, for example, there is financial hardship. Applications are now being received from disabled residents.

I take up my hon. Friend's remarks about the transferred stock and the position that will arise after 1 April 1986. He referred to the housing that was transferred from the GLC to Lewisham council, which comprised 13,415 units, and the arrangements for renovating these properties after the GLC's abolition. I understand his concern and the concern of those who live in the blocks. There has been a good deal of propaganda from the GLC and its friends implying that the GLC's programme to renovate this stock will not continue after abolition.

Much of the propaganda has drawn a veil over the GLC's track record. My hon. Friend will know that his constituents on the Sydenham Hill estate are alarmed about the poor housing conditions there. The Government's contention is that the boroughs, as the primary housing authorities in London, will be better able to carry through this programme of repairs successfully. Much of this alarmist talk fails to recognise the arrangements that we are to introduce to allow the boroughs to renovate this stock when they inherit this responsibility on abolition.

My hon. Friend referred to some guarantees. I am not sure who gave the guarantees to the tenants of the GLC transferred stock. The Government made it clear that they could not underwrite any GLC commitment to bring the stock to a satisfactory condition by 1992. We have made it clear that the GLC's housing investment programme allocation would be allocated to the boroughs after abolition. The resources will not be lost to London. London's entire housing capital allocation will be distributed among the boroughs, including the share which would otherwise have been given to the GLC.

My hon. Friend suggested that some of the allocations should be earmarked, and my Department is considering this. We have already asked Lewisham and other boroughs to make a bid for 1986–87 which will reflect the responsibilities which they will inherit from the GLC. The distribution of the allocations will take account of the expenditure liabilities. It is also our intention that virtually all the prescribed proportion of housing capital receipts will be distributed in proportion to the housing capital allocations including the receipts associated with the mortgage account.

It may be that the London Residuary Body, which will be responsible for the GLC's mortgage account, will be able to unlock further resources to London by re-financing ex-GLC mortgages. There will be no net loss of resources to London as a result of abolition. The boroughs will have the advantage of receiving those resources directly and accordingly will be able to manage their own programmes according to their own priorities.

My hon. Friend the Member for Lewisham. West spoke mainly about capital. We do not intend that the boroughs should suffer the loss of the revenue assistance which they currently receive from the GLC on the transferred stock. We will ensure that the broad financial effect of these payments is maintained after abolition by adjustment to Lewisham council's entitlement to rate support grant.

These arrangements will cover the obligatory payments; currently made by the GLC and will take account of the revenue consequences of future renovation works to transferred stock which would otherwise have fallen to the GLC. It is important to recognise that these arrangements will apply irrespective of authorities' current spending position in relation to their grant-related expenditure assessment or their targets — should we continue to have targets.

I hope my hon. Friend will see that the housing investment programme allocations and the changes made to the capital receipts rules for 1985–86 were essential to ensure that capital spending did not exceed the public expenditure plans and that the level of public sector borrowing was kept on track. In the longer term, we are looking again at the system and at possible improvements. We would like to achieve a better match between our duty to control the overall level of capital spending and borrowing in the national economy and the need at local level for a firm basis for future planning. Consultations with the local authorities have already started.

Within the constraints on resources, the best use must be made of what is available. We are improving our knowledge of the condition of local authority housing stock and the need for expenditure on it. The recently issued advice on empty dwellings and the establishment of the urban housing renewal unit are positive steps forward as are our proposals for a new approach to home improvement, which were outlined in a recent Green Paper.

My hon. Friend has argued forcefully in support of Lewisham's housing investment programme submission for 1986–87. The council's bid should be with my Department shortly and officials will meet representatives of the council — probably in the early autumn — to discuss the submission in detail. Before the allocation for 1986–87 is made, we shall give very careful consideration to everything that Lewisham council has to tell us and anything that my hon. Friends have to say. Full weight will be given to all the points that have been made tonight, including the need for continuing investment on the former GLC estates. I hope that my hon. Friends the Members for Lewisham, West and for Lewisham, East will use what influence they have to persuade Lewisham council to broaden its horizon and to look at some of the innovative solutions which are already being adopted by other London authorities.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve o' clock.