HC Deb 28 February 1986 vol 92 cc1235-42

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

2.33 pm
Mr. Ken Hargreaves (Hyndburn)

I thought for some considerable time before I decided to bring the housing problems of Hyndburn before the House once again. I should hate to be responsible for the borough council being thought of as whingeing or complaining. However, because the constituency is and always has been my home I receive daily reminders of the problems that we face. As I hope to live in Hyndburn long after I have ceased to be a Member of Parliament, I should be distressed if failure to deal with those problems were to be a memorial to a lack of effort on my part.

The twin aims of the Government's housing policy are to make Britain the best housed country in Europe and to increase owner-occupation. Both are laudable aims, and, though we are a long way from achieving the first aim, impressive progress has been made. If the Government were to announce before the next general election that they had achieved 80 per cent. owner-occupation, it would be regarded as a major triumph. In Hyndburn we already have that remarkable percentage. The problem for those of us concerned with housing in Hyndburn is to ensure that we maintain it at that level and do not allow it to go into reverse.

I do not need to rehearse before the Minister the statistics of which he is well aware—Hyndburn's 80 per cent. owner-occupation, per capita resources below the national average, despite having the 28th highest per capita general needs index score, and the borough's inability to generate capital receipts. These facts have been set out previously in discussions, debates and documents.

I want to draw the Minister's attention to the increased difficulties which we now face as a result of the reduction in the housing investment programme allocation for 1986–87. In previous housing debates, I have paid tribute to the Government for their interest in and help with the problems which Hyndburn faces. The extra resources, visits and meetings with the Minister did much to reassure the anxious local authority that the problems it faced were understood by the Government. Therefore, it came as a shock when the HIP figures for 1986–87 were announced. Hyndburn's allocation had been reduced from £0.410 million in 1985–86 to £2.572 million for next year. That reduction is serious in itself, but is aggravated by the fact that the Government expect local authorities to make up 42 per cent. of total spending by using capital receipts compared with 25 per cent. in the current year.

Hyndburn's inability to generate capital receipts means that available receipts are unlikely to increase total spending by more than 14 per cent. I regret that arguments which Hyndburn put forward on previous occasions and which had the support of the Department of the Environment at regional level have apparently been ignored at the national level. I accept that there is no possibility of an increase in Hyndburn's HIP allocation for the coming year. I am therefore anxious to explore other ways to ensure that the borough can attract more resources. I also wish to seek assurance for the future.

The authority has never believed in using Government restrictions as an excuse for inaction and it has tried virtually all the new opportunities presented over the last few years. Many have not proved of any great help in an area where market forces reduce the potential for private investment. I believe that the borough council has been progressive and is worthy of encouragement. The council introduced the volume sale of its relatively few council houses prior to the Housing Act 1980. Improvement for sale and homesteading have been used to sell local authority housing for owner-occupation. Both proved useful in specific circumstances but had comparatively little potential. Partnership housing developments were undertaken with significant private investment, but, after almost three years, some of the houses remain unsold. The private sector shows great reluctance to build on redevelopment sites.

The authority believes in a block renovation approach and is now initiating block repair schemes. The need for more responsive estate management has been accepted and a priority estate project is about to start on the largest problem estate and is to be followed by similar projects elsewhere.

The special needs of the elderly have been recognised and the council has taken up with enthusiasm the recommendations made by Dr. Anthea Tinker in "Staying at Home" and has just inaugurated its first warden call scheme in council houses. This will be extended shortly to the private sector. The council has also developed extra care provision in sheltered housing to ensure that the frail elderly are able to remain there rather than have to move into residential homes at a greater cost to public funds.

It remains the authority's policy to encourage housing association activity as an integral part of its housing strategy. The council's initiatives show that it is willing to try anything to help to alleviate the problems and to prevent the even greater difficulties that we foresee arising in the future unless action is taken now. The council has proved that it uses its limited resources effectively and imaginatively. It is worthy of support. Whatever form the support may take this year, it will only limit the damage done as a result of the reduced HIP allocation, but it could, if coupled with some reassurances about the future, do much to reduce anxiety felt by councillors, officials and householders.

The council responded quickly and positively to the announcement of the establishment of the urban housing renewal unit and it has worked closely with its officials and advisers to prepare a package of measures which would improve an estate and bring in private finance to redevelop part of it. A reasonable response to the council's bid for funds would be an immense help to the problem estate involved, a great support for the priority estate project initiative and release much needed funds for use elsewhere in the private sector.

A favourable response to the council's approach for Community refurbishment scheme funding for Huncoat would improve houses and encourage people in the area, which has the highest unemployment in the borough. Although help with urban housing renewal unit schemes and CRS would remove to some extent the immediate financial worries, the council is anxious about possible changes in Housing Corporation funding and the rumoured moves away from the HIP system.

The criteria for Housing Corporation investment have recently been changed to priority areas only — it is priority based on arbitrary criteria which result in authorities with similar GNI scores having scores that vary from 22 to 88. Hyndburn scored 22 which, for 1986–87, is a cut-off point. We are worried that Government pressure for a higher cut-off point could lead to a loss of Housing Corporation investment in the borough, which would be a most bitter blow. May we be assured that less arbitrary criteria will be used in future and that the council can anticipate Housing Corporation investment?

Rumours of moves away from the HIP system are worrying. The principle of HIP — allocation in accordance with needs—is sound, and the GNI system, while flawed, is a good basis to work on and reasonably comprehensible. Can my hon. Friend assure the council that HIP allocations will continue, that they will be based on a reasonably sophisticated index of needs and that they will include some means of weighting to take account of potential for private funding to replace public funding needs?

My constituents are suffering from poor housing conditions, which are prevalent in many parts of Hyndburn. They know from experience that only a Conservative Government is likely to help them. They are aware that, during the last year of the Labour Government, only £223,000 was spent on improvement grants, whereas we spent £1.8 million last year. The people of the borough were shocked and amazed by the recent episode in the council chamber, which showed the lack of concern of Labour and SDP members. The two parties voted that the director of housing and the chairman of the housing services committee should not be allowed to accept an invitation from my hon. Friend the Minister for Housing, Urban Affairs and Construction to meet him to discuss Hyndburn's undoubted housing problems. The decision was made because Labour and SDP councillors were not included in the invitation. Do they really believe that the people who desperately need home improvement grants, for example, are interested in who talks to the Minister as long as he gets the message and Hyndburn gets the money? Fortunately, because of the courage and determination of the chairman of the housing services committee, Councillor Mrs. Elizabeth Court, who, like me, is willing to go anywhere and talk to anyone if it will help in any way to reduce our housing problem, the meeting with the Minister went ahead, as Mrs. Court attended in a personal capacity and not as housing chairman. Although we were denied the contribution which would have been made by the director of housing, Mr. Edgar Bignell, the meeting proved most useful and I hope that, as a result, Hyndburn's case for UHRU and CRS was reinforced.

Because of the reduction in the HIP allocation, it is vital that we find other sources of funding. I accept that the progress towards making this country the best housed in Europe depends largely upon the provision of a sound economic base and the creation of real productive jobs, and not just the making of artificial jobs. I look to the Government to provide a balanced programme for housing, to provide the public finance necessary to pump-prime housing strategy, and to do it in a way that attracts additional private investment. Time is short. Local authorities are increasingly dependent upon capital receipts. The amount of those capital receipts will steadily diminish over the years and the Government must take account of that.

I support the Government's policy of reducing public spending, but their housing policy runs contrary to that aim, as it does not reduce public spending, but simply postpones it. Such a postponement will lead only to the need for far greater spending in the not too distant future. The Government should switch more resources into housing and must ensure that the money is used to greatest effect.

I commend to the Minister the neighbourhood revitalisation service. At present there are four pilot schemes in operation in Sheffield, Oldham, Bedford and Gloucester. Their purpose is to demonstrate that a properly co-ordinated partnership between public and private sectors, with a small amount of public sector investment, can generate a gearing ratio of private sector investment in the housing stock. That concept can be developed to include business investment in the area.

It is too early to say what the gearing ratio should be, but it is expectd to be in the ratio of 1:3 over a period of time. Such schemes are an effective use of scarce resources and additional money allocated to similar schemes would be well spent—not least in Hyndburn, which would be one of the areas to benefit from an expansion of NRS.

I urge the Government to look closely and urgently at the whole question of improvement grants. I hope that they will seriously consider declaring housing stress areas into which additional capital from revenue resources could be invested to concentrate spending on areas with the highest levels of owner-occupied properties that are substandard and in need of repair.

Such concentration of resources would be justified, as it would protect individuals who have invested their limited resources in their own homes. It would be cost-effective and would create much needed jobs because improvement grants are labour-intensive. Given that investment in improvement areas has all those advantages, it is disappointing and hard to understand why the Government have not moved more resolutely in that direction.

Lent is a time for repentance and a time to examine exactly where we stand. It would be a good time for the Government to do just that in relation to their housing policy.

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

I am grateful to my hon. Friend the Member for Hyndburn (Mr. Hargreaves) for once again bringing before the House the housing problems facing his constituents. I well remember the formidable case that he presented in an Adjournment debate on 12 November 1984, following a deputation of councillors and officers to my Department. I was impressed by the careful preparation of the case. I acknowledge the thoroughness and conviction with which my hon. Friend has again brought before the House the problems of his constituency. Today's debate follows a deputation to my hon. Friend the Minister for Housing, Urban Affairs and Construction.

I wish to pick up my hon. Friend's point about the Housing Corporation. He is concerned about its prospects for investment in Hyndburn. Each year the corporation submits proposals for its regional distribution for the approval of my hon. Friend. In the past, the basis of that distribution has been the generalised needs index, modified by the corporation to reflect the sort of projects carried out by associations and weighted towards regions with designated inner urban areas within their boundaries. Variations in costs between regions are also taken into account. Changes in any region's share of the total resources for new projects each year were limited to five per cent. Because of the concern over the shift in resources from the north to the south, regional shares were frozen by the corporation at the 1984–85 level.

The corporation is now reviewing its distribution methodology and its proposals for change are expected later this year. In the meantime, there has been a change in the system and we have asked the corporation further to concentrate resources for new approvals on the areas in which the needs are greatest. To do this, the corporation has used its own housing needs indicator and the Department's measure of multiple deprivation. The corporation has identified 80 areas which would receive priority in the allocation of resources for new projects. Hyndburn has been included in recognition of the difficulties that my hon. Friend has outlined. In total, the allocations for those 80 areas will be maintained in real terms and the corporation will make its allocations on that basis.

I understand that my hon. Friend is as much or even more concerned about what may happen under any new system in the future. When we receive the corporation's proposals for the distribution methodology for future years we will certainly bear in mind the difficulties facing Hyndburn.

At the meeting to which I have referred an invitation was extended to my hon. Friend the Minister for Housing, Urban Affairs and Construction to visit Hyndburn. The chairman subsequently wrote to my hon. Friend the Minister repeating the invitation. My hon. Friend the Minister has accepted the invitation, although other pressing commitments mean that he may not be able to honour it for a month or so. Nevertheless, my hon. Friend the Minister welcomes the opportunity to see at first hand some of the problems about which we have heard today. In particular, my hon. Friend the Minister may wish to look at the Huncoat estate to which my hon. Friend the Member for Hyndburn has referred and on which I shall have something to say in a moment.

My hon. Friend the Member for Hyndburn reminded us of the need for expenditure on the public housing stock. The Government recognise that need, but we hope to harness the energy and resources of the private sector to try to make faster progress than would be achieved if we relied solely on the public sector. In that connection, the urban housing renewal unit was set up to try to engage the interests and resources of the private sector to turn round some of the difficult estates. There has been a good response to that initiative from local authorities of all political persuasions.

Two days ago, a meeting took place between the unit, the Department, regional office representatives and council officers to consider the possibility of making progress on the Huncoat estate just outside Accrington which I understand is one of the more difficult estates that the local authority has to manage. I understand that it was quite a positive meeting. The formal position is that we are now awaiting bids from the local authority both for money held back by the Department to fund the UHRU initiative and for proposals funded under the community refurbishment scheme. As soon as we have those formal bids we shall consider them urgently and I very much hope that we shall be able to make progress.

I understand that the community refurbishment scheme originally put forward by the local authority was within the yardstick normally supported by the Department and that it may be possible to make progress by putting more into the community refurbishment scheme to take some pressure off the more substantial bid on the UHRU budget. It may also be possible to phase the expenditure over two years so that it is more digestible from the Department's point of view.

The initiative taken by the local authority on the Huncoat estate is exactly the kind of initiative that we need throughout the country. If progress can be made on that kind of formula it will be in everyone's interest. I understand that part of the package involves the sale of 26 houses for owner-occupation. That will ensure the cooperation of the private sector. Moreover, the community refurbishment scheme may be able to use people on the estate who are unemployed to work on the refurbishment of the estate and the improvement of the environment. That will not only provide creative work for those people but improve the environment in which they live.

The community refurbishment scheme started on Merseyside as one of our initiatives to improve living conditions for council tenants. It is now being extended to other parts of the country as part of the package under the priority estates project and urban housing renewal. I understand that on the Huncoat estate the council already has some experience of providing opportunities for work under the Manpower Services Commission schemes and that there are plans to extend that. Again, the council's readiness to avail itself of resources from Government is just the kind of initiative that we want.

A bid has been made for extra resources to complement the HIP allocation, to tackle the Huncoat estate. Again, when we get the bid, we shall see what we can do to help. Although Hyndburn was not one of the areas which we initially targeted, we have been impressed by its approach and the difficulties facing the estate.

My hon. Friend spoke about the reduction in the HIP allocations. One has to look at the total picture. The HIP allocations may have been reduced, but the provision for total investment in housing by the public sector was increased by about £200 million during the last public expenditure round. The apparent paradox is accounted for by the fact that local authorities as a whole have more capital receipts that they can draw on to complement their HIP allocations, and also that there has been considerable overspending on the housing side, which the Government have had to take into account in fixing the HIP allocations.

My hon. Friend rightly said that the ability of Hyndburn to generate capital receipts is relatively low compared with other local authorities, because of its relatively small stock. As he may know, we have put forward a new proposal for capital expenditure. I think that the right approach for Hyndburn is to make its response known through its local authority association, and we should be interested to hear what it has to say.

I understand that the council takes the view that with an existing supply of low-priced housing the opportunities for low-cost home ownership ventures are fewer than in other places, but it is considering the sale of several houses, including those at Huncoat, to which I referred. The consultation paper, entitled "Review of the Local Authority Capital Control System in England and Wales", may make some progress as it recognises that the present system restricts our scope for allocating resources to authorities with the greatest needs because at the moment we cannot take account of the level of capital receipts.

I was interested to see what Hyndburn council has done in its housing department. It has recently brought both its public and private sector services under one umbrella and appointed a new director of housing and environmental health. That improved co-ordination of the council's services should lead to a better use of both staff and financial resources.

One of the issues that concerns my hon. Friend is the revenue constraints on his local authority. There was a change to the housing revenue account factor, known colloquially as E7, which was incorporated in the 1985–86 grant-related expenditure settlement. That change should have gone a considerable way towards meeting the council's concern about that indicator, and I hope that the council welcomes the change. The council has also made representations about the grant-related expenditure assessment for non-housing revenue account housing. Again, that is something that we hope to look into next year.

There are difficulties about allocating resources to local authorities at the moment and taking full account of their housing investment needs. We are now talking to the local authority associations about that. Last month we published a Green Paper entitled "Paying for Local Government", which contained proposals for a new system of capital controls. That was followed earlier this month by the publication of a more detailed consultation paper. One of the options which may help Hyndburn, and on which we have invited comments, would distribute allocations based on a needs element and an element reflecting an authority's performance in generating capital receipts. Again, we are interested in the local authorities' views on that.

My hon. Friend the Member for Hyndburn rightly drew attention to the marked increase in expenditure on home improvement grants since 1979. The figures that I have for Hyndburn show that for 1979–80 about £264,000 was spent on private sector improvement grants. That figure rose to £1.8 million in 1984–85, and the latest estimate for this year is £1.6 million. Given, as my hon. Friend said, the high percentage of owner-occupiers, many of whom are elderly and have a restricted ability to fund improvements themselves, that sixfold or sevenfold increase in expenditure on improvement grants is a welcome response by central Government to the issues and concerns facing my hon. Friend's constituency.

There are constraints on public expenditure, and my hon. Friend invited the Government to go into repentance as this is the time of the year when such a posture is fashionable. We understand the problems facing housing authorities. The solution is to look at the total picture and to recognise that when dealing with housing, it is legitimate to consider both public and private expenditure. Although public investment in housing may have decreased, the figures for new starts in the private sector in the country as a whole were the highest last year for some 10 years. Private individuals are spending about £9 billion a year on improving their own homes, and that is a higher figure than the total public sector spending on improvement grants.

The picture is rosier if one takes an overall view than if one concentrates simply on the public sector. When my hon. Friend the Minister for Housing, Urban Affairs and Construction visits my hon. Friend's constituency, he will see at first hand many of the issues that we have discussed today. I assure my hon. Friend that we will respond as sympathetically as we can to die case that he has made this afternoon. I am sure that the fruitful relationship between my Department and the council will continue, and that we will ensure that the council continues to receive its fair share of national resources.

Question put and agreed to

Adjourned accordingly at Three o'clock.