HC Deb 24 February 1987 vol 111 cc244-50

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

10.23 pm
Dr. Oonagh McDonald (Thurrock)

Thurrock has about 500 of the 1.5 million prefabricated concrete houses and flats which were built during the 1940s, 1950s and 1960s. More than 200 of them have been sold to tenants and about 300 are still owned by Thurrock borough council. The types of concrete house involved include Airey, Cornish unit, Lecaplan, Stent, Unity, Wates and others.

The problem with concrete houses, as the Minister well knows, is that the concrete gradually crumbles away, steel reinforcement erodes and cracks appear. The pre-1960 houses are, of course, deteriorating rapidly. The Housing Defects Act 1984, now part of the Housing Act 1985, was supposed to deal with those problems, but from the start the Labour party asked for extra money to be given to councils to enable them to assist owner-occupiers and council tenants, for whom the Government did not allow in the legislation.

Councils such as Thurrock are struggling to meet their obligations to owner-occupiers under the legislation. First, to give some indication of the problems, I want to refer to a letter sent by the council's consultants, M. Dysons Associates, to the council's housing committee on 20 January this year. Tenders had been requested for the repair and reinstatement of Wates houses at South Ockendon. There are approximately 40 houses and the cost of repairs varies from just over £800,000 to just under £1 million depending upon the tender. In fact, the highest tender, curiously enough, came from Wates Ltd. for the structural reinstatement for Wates houses and comes to just under £1 million.

The grant applications based on one of the tenders, the cheapest in fact, mean that the council anticipates grant applications of the order of £23,000 per basic house. That is above the nominal £20,000 expenditure limit and the reinstatement costs of some houses would cause a further increase. There are two reasons for that. First, the houses are in Essex where the highest prices in the country are being obtained as a result of the volume of work available to contractors in the area. Secondly, the party wall construction of this variant of the Wates houses is the most expensive to deal with. Comparisons are made with similar Wates houses in the north midlands area and the cost there comes to just over £20,000 for repairs.

According to M. Dysons Associates, a 15 per cent. loading for work in Essex seems in proportion. The facts on the tenders received by M. Dysons Associates on behalf of the council for 15 contracts for Wates house repairs throughout the country have been reported to the Department of the Environment. Therefore, hopefully the Minister will have information available about the fact that the cost of reinstatement, even at the expenditure limit of £20,000 per house, is sufficient to cause the borough council considerable struggle. However, the costs in terms of the tenders submitted in the Essex area are above the expenditure limit, and that merely makes the problems even worse.

Some notion of the extent of the problems is given again in the state of applications given by the borough council as of January this year. A total of 42 Cornish unit style concrete houses are the first to be reinstated. The value of the potential grants is estimated by the council to be £522,000. The Minister may well say that the cost of reinstatement was taken into account in the housing investment programme allocation last year, which was £606,000 above the previous year.

When one looks at the costs of reinstating 42 of the houses. The addition made last year was insufficient to meet Thurrock's problems. The council made clear that the total costs of all potential grants to the owners of concrete houses in Thurrock is over £4 million. The inclusive amount of the council's HIP allocation for 1987–88 is £2 million, which takes account of the 20 per cent. cut on last year's allocation which the Government have just announced. The chief executive of the council said in a letter to the regional controller of the Department of the Environment: My council faces a substantial problem in complying with the legislation to PRC dwellings. There are 240 such dwellings in the borough eligible for reinstatement grants and these will lead to potential grants to the owners in excess of £4 million. Obviously, with the kind of HIP allocation of Thurrock borough council and the costs of reinstating these dwellings, it will be a long time before people have their houses repaired and are able to sell them again.

I am well aware that the Government have requested bids for a share of the extra £14 million from local authorities set aside for the repair of concrete houses and that these bids should come in by the end of this month. Thurrock will put in its hid. I have already indicated the scale of the problem that Thurrock faces, as do many other district housing authorities. The sum of £14 million will not go far in dealing with essential repairs. If Thurrock council would like £4 million, that would leave only £10 million for other authorities which have similar and even more extensive problems in some cases.

The first Government statement about the state of these houses was made in November 1983. Many eligible owner-occupiers have been waiting for more than three years for their properties to be repaired, placing many of them in an extremely difficult position. They need to sell those houses and they cannot expect to sell them because would-be buyers would not ba able to get mortgages on them.

I refer to a different problem concerning Lecaplan and other large panel concrete houses which are not covered by the Housing Defects Act. A letter I have received from the Building Research Establishment says that there is no presumption that these large panel systems are faulty but rather that any remedial needs should be assessed on the basis of a proper understanding of the issues and the best available information. Lecaplan houses are not necessarily faulty.

The problem is that we are still waiting for the BRE report. As long ago as 1985 I received a letter from the Building Societies Association saying that it would be extremely helpful if that report was published as soon as possible. The report is to be published, I understand, in early summer. Therefore, the delays go on and we are still waiting for this extremely important report which will make it easier for us to press building societies to lend on these properties.

My constituents tell me that a number of major building societies will not lend on these properties. Constituents have had difficulties locally in selling these houses because would-be buyers have been unable to obtain mortgages from the Abbey National, the Leeds, Nationwide, Woolwich, Town and Country and the Halifax building societies. Leading building societies will not lend on such properties. My constituents who live in them and other similar properties, however, are waiting for repairs and suffering greatly. The Government are supposed to favour owner-occupiers, but these owner-occupiers are in a miserable and desperate situation.

Many of my constituents have invested their life savings in houses which they are unable to sell. Repairs cannot be carried out because the Government will not make money available or allow councils to spend their capital receipts, despite requests from Thurrock to do so. They have also received requests for more flexibility in parliamentary questions that I have tabled.

This matter has been raised with the Minister in debates before, but he has failed to give a satisfactory answer. All that the Government have done so far is to pass a law and fail to provide the money necessary to meet the responsibilities which it implied local authorities should take on. They desperately need additional funding for such responsibilities.

It is plainly impossible for Thurrock council to assist my constituents out of its funds for housing. It needs more money. My constituents need to be able to sell their homes and move, either to get a job or for personal reasons. Their inability to do that puts a great strain on them — so much so that some couples tell me that their marriages are under stress as a result. That is intolerable.

I want to hear three things from the Minister. First, I want to know whether the Building Research Establishment report on large panel houses will be brought forward quickly. Secondly, will the Minister ensure, as far as it is possible for him to do so, that building societies understand that these types of house are not necessarily faulty and that they should be willing to lend on them? Thirdly, will the Minister say what money will be made available so that Wates houses and other concrete houses in my constituency can be repaired as soon as possible?

10.37 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)

I commend the hon. Member for Thurrock (Dr. McDonald) on giving the House the opportunity to discuss these important topics. I would like tonight to cover three aspects which I know are of particular concern to her — first, the Housing Defects Act 1984 and how it is working in Thurrock; secondly, the position of owners living in properties not designated under that Act but who are concerned about saleability and mortgageability; and, thirdly, repair work for properties remaining in Thurrock's rented stock, and the overall resources available.

I should like to repeat two basic but very important points about the Housing Defects Act which, as the House will know, is now consolidated into part XVI of the Housing Act 1985. First, the Act attracted all-party support when we took it through Parliament in 1984. We must not lose sight of that fact when we discuss any problems that may have arisen since. It was always accepted that we would need a reasonable period to carry out the assistance programme. That is why the designations allow 10 years for owners to obtain assistance. I must remind the House that well over seven years still remain, so no one need feel that they are running out of time.

Thurrock district council, along with certain other authorities, has quite a variety of different designated prefabricated reinforced concrete types—Airey, Cornish Unit, Stent, Unity and Wates. The good news is that there are now National House Building Council approved repair methods for all those types—and others, too. In fact, PRC Homes Ltd.—the NHBC's subsidiary, set up to approve repair methods and provide a warranty—has now approved 28 repair methods for eight different PRC types; and these cover over 60 per cent. of all designated properties. More proposed repair methods are in the pipeline. So, once again, we are making progress.

The hon. Lady has described some of the difficulties in her constituency. I do not think that it would be appropriate tonight to get into the details of particular cases, though I will of course respond in writing to the points which the hon. Lady made and to any other points she wishes to put. What I would like to stress is that the Act allows the local authority, the owners and the repairers a reasonable degree of flexibility, for example, on the procedures for getting repairs done. My Department has issued guidance on this, first in 1984, when the Act first came into force, and then again last summer, when we put out a circular explaining how local authorities and owners might tackle reinstatement and how this meshed in with the NHBC approval and warranty procedure. But I must stress that final decisions on how to implement the legislation—and therefore on the handling of particular cases—must rest with the local authority concerned.

I am aware of problems concerning the repair of Wates houses in Thurrock and, in particular, that there are differing views on an appropriate repair method. Under the Act the council has to specify the works to be done and the amount eligible for grant. We look to authorities and owners to reach sensible understandings on actual repair methods to be used: if the council has in mind any particular repair methods—especially one not approved by PRC Homes Ltd—it will need to be satisfied that it meets the requirement of subsequent mortgageability. I understand that in the cases she mentioned of the Wates homes we may be approaching agreement.

We look to authorities to operate the Act in a reasonable way; and we look to owners to be patient. One approach worth serious consideration, particularly where resources are tight—as I acknowledge they may be—is for the council, owners, and indeed repairers, to achieve an understanding on a likely timetable for assistance, spread over a reasonable period. This allows everyone to plan sensibly and to know where they stand. Obviously, any hardship cases can be dealt with quickly, through repurchase as necessary, as provided in the Act itself. Beyond that, where owners would like repair — and I know many do—a sensible understanding on how it is to be spread over time can be a great help to everyone.

I should like to turn now to the position of those owners whose properties are not designated under the housing defects legislation. I know that the hon. Lady is concerned on behalf of the owners of the Lecaplan large panel houses. As the hon. Lady knows, properties can be designated under the housing defects legislation only if they are inherently defective by design or construction and if there has been a substantial fall in value by virtue of that fact becoming generally known. Designation is therefore a major step and not one to embark upon lightly. Indeed, many owners do not look forward to the notion of their house being declared as defective, even if there is a scheme of assistance to follow. So far as Lecaplan is concerned, I can reassure the House that we have no current plans to designate.

What we have done—as the hon. Lady knows and has mentioned—is to commission our Building Research Establishment to carry put a thorough study of large panel buildings generally. Lecaplan is of this large panel type. This research is going well and a major report, which includes structural appraisal, should be complete by early this summer. The hon. Lady has said that originally we had a somewhat earlier date in mind, but it has, quite understandably, taken BRE a bit longer to assemble all the important material it needs. I am sure that the House would agree that we want a thorough and helpful report and that it is sensible to take the time needed to achieve that.

That report should be valuable to all large panel owners, both local authorities and, of course, their tenants, and owner-occupiers. Also—and this is very important — it will be useful for building societies and other lending institutions when they are deciding whether to offer a mortgage advance. One of the problems we have seen following the PRC issue is very regrettable widespead blight on non-traditional properites in general, even of types that bear little or no relation to those designated under the housing defects legislation. We are concerned in the Department to see this blight removed wherever possible. Good research and the resulting increased understanding all round certainly helps, but we are also talking directly to the Building Societies Association on this matter: and I understand that it expects to issue further guidance to its members in the near future. I hope that that will reassure the hon. Lady to some extent, as that was one of the points she mentioned.

Again, I have to stress that individual societies or other lending institutions must decide on and take responsibility for their own lending policies. That cannot be a matter for the Government. But I would certainly encourage owners who are having difficulties with the mortgageability of their properties to shop around. Not all societies, or indeed banks or other lending institutions, take the same view.

If there are technical problems or uncertainties, the local authorities may be able to help with information. They usually commissioned the properties and have maintained the rented ones ever since, so they will have a great deal of local knowledge, which may be very valuable both to owners and to local building societies.

I hope that what I have said is helpful to the hon. Lady and, of course, to her constituents in Thurrock. My hon. Friend the Minister for Housing and I would be extremely grateful if she could keep us informed of any developments on Lecaplan in her constituency, because we realise that the owners have genuine concerns.

I turn now to another area of great interest to the hon. Lady and that is the question of Thurrock's rented stock and HIP resources. The Government are concerned about the condition of local authority rented housing. That is why we commissioned the 1985 stock condition inquiry. Indeed, we were the first Government to conduct such a systematic survey, which helped to give individual authorities a better picture of their property. That is why we initiated Estate Action, previously called the Urban Housing Renewal Unit, to work up specific projects for some of our worst affected urban estates. As the House will know, we have made available £75 million for such projects in 1987–88, which is a 50 per cent. increase on 1986–87.

Indeed, local authorities generally are spending an increasing proportion of their resources on renovation. National expenditure is now running at some £2½ billion a year, which is split broadly 50: 50 between capital and revenue. These are large sums in anyone's language. and we must not forget the role of the private sector. Authorities need to be willing to tap private sector expertise and resources.

For 1987–88 we have increased the gross housing expenditure provision by £390 million and we expect to see even greater spending on renovation. Obviously, we have to operate within the constraints of the existing capital control system. For example, we must acknowledge the large spending power that has accumulated nationally through capital receipts. Our decision on the overall resources available for HIP distribution had to recognise that fact. Nevertheless, we were able to honour the assurance given by my right hon. Friend the Secretary of State and his predecessors that allocations for 1987–88 would not be less than 80 per cent. of those for 1985–86. I am sure that the hon. Lady will agree that we were absolutely right to do that. Moreover, we have retained, in addition to the £75 million for Estate Action, a national reserve of £14 million for authorities facing particular difficulties with housing defects obligations. We have asked for bids by the end of this month and hope to make the additional allocations by the end of April.

I hope that I have answered some of the hon. Lady's points. This is only a short debate and we do not have time for much detail. I should like to close on the thought that, whether it be the Housing Defects Act 1984, non-traditional dwellings or local authority rented stock, we are making progress. With patience and good will, that will certainly continue.

Question put and agreed to.

Adjourned accordingly at seven minutes to Eleven o'clock.