§ Mr. Peter Snape (West Bromwich, East)I applied for this Adjournment debate on the last day of term to bring to the attention of the House the plight of those in my constituency and in other constituencies in the west midlands, including yours, Madam Deputy Speaker, who have purchased their Smith-type homes under various schemes and the tenants of similar houses who are waiting for repairs to be carried out. The local authorities are expected to pay for those repairs out of their increasingly meagre housing investment allocations.
In the case of Sandwell—our local authority, Madam Deputy Speaker— those allocations have decreased from £12.3 million in 1986–87 to £10.5 million in 1987–88. Sandwell's application for the current year was about £55 million, and this miserly funding from central Government means that the council will have to operate its repairs programme under enormous pressure, Smith-type and other defective properties apart. Housing officials have estimated that, given the rate of housing allocation from the Government, it will take until the year 2013 for all pre-second world war properties in the borough of Sandwell to be modernised. Some of the council properties built between 1945 and 1964 will probably also require major repairs.
You and I, Madam Deputy Speaker, hold some of our surgeries at West Bromwich town hall. I know, because we discuss these matters, that you and I see a continuing and apparently non-stop stream of people who have housing problems. The same happens to my hon. Friend the Member for Warley, East (Mr. Faulds) and my right hon. and learned Friend the Member for Warley, West (Mr. Archer). Our constituents come to see us about the lack of repairs to their properties or the need for swifter action by the council to carry out those repairs. None of the four of us has any direct responsibility for such matters, but it would take a braver man than me to tell some of my constituents that. I know that you and our two colleagues refer our constituents' complaints by letter to the housing department, but the reply is always the same: "We do not have the money adequately to repair the properties that we own." I accept that that must be the case, given the cut in housing improvement programme allowances in recent years. Therefore, the solution for those who live in Smith-type houses recedes with every year that the HIP allocation is cut.
The problem cannot be accurately described as a national one, but it is of regional concern, with most affected houses concentrated in the west and east midlands and in south Wales. I understand that about 4,500 properties were built using the system. The Building Research Establishment report on the structural condition of Smith houses was published as long ago as December 1983, and it concluded that they all suffer from some defects. It said that the houses showed cracks at the junctions of the concrete blocks and between the external and partition walls. The BRE also found that some Smith houses in Birmingham were seriously defective because of the use of shale fill in the foundations.
Those details have been debated previously in the House, not least by you, Madam Deputy Speaker. In the previous Session, before you took up your present post, you initiated a similar debate and received an answer from 664 the Minister at that time which was similar to the one that I fear I will receive from this new Minister. Although I congratulate the hon. Member for Broxbourne (Mrs. Roe) on her swift elevation to her present position, and without anticipating the brief that has been prepared for her or the fact that she will no doubt deliver it as elegantly as ever, I hope that the pleas of you, Madam Deputy Speaker, and of myself on behalf of our constituents will not fall on stony ground. I should not really say that because it sounds ungallant, but the House will know what I mean.
The stark fact is that, although the BRE report was published in 1983, in July 1987 there is still no approved and licensed repair to the Smith properties, and owners, tenants and councils alike are in a state of limbo, in which they have existed ever since the structural problems of the houses first became seriously apparent. I, and those owners, have become tired of the complacency exhibited by successive Conservative Ministers.
The right to buy has been a much trumpeted venture on the part of the Government. Indeed, in the recent election campaign it formed a central plank of their manifesto and appeal to the electorate, as it did in 1983. I make no complaint about that, but little or nothing is heard of the plight of those people who have exercised the right to buy their homes from local authorities and who now find themselves facing personal economic disaser. Their plight might not cut much ice with those who can afford to be in the two or perhaps three home-owning league, but it does with me. In the surgeries to which I referred earlier, in addition to the pleas for repairs from tenants of council-owned property in the borough of Sandwell, I have heard heart-rending cases of hardship from those owners who have been unforunate enough in the past to purchase Smith-type houses. They see no real prospect of re-purchase in the immediate future; they have waited in vain for years for an approved system of repair. They have set up a national scheme to enable the owners of Smith houses to have some communication with each other. The national secretary of that scheme, Mrs. Sylvia Holden, resides in your constituency, Madam Deputy Speaker, rather than in mine, but I do not think that I breach any parliamentary protocol when I tell you that she has been to see me on behalf of those constituents of mine who are in a similar position to hers.
What is perhaps far worse for her and the people whom she represents is that they have probably made the largest single purchase of their lives. They are acutely aware of the suspicions of prospective buyers if they try to sell their homes on the open market. It is futile to point out—it has been pointed out in the House by Ministers—that some of the homes have less serious defects than others. I assure the Minister that, to people who are planning to purchase a house in those areas of the country in which Smith properties are most densely located, it matters not whether they are founded on shale, quicksand or the rock of Gibraltar. They are still Smith houses, and it quickly becomes apparent that they are; and, as such, they have about as much allure to the prospective buyer as Dracula's castle.
I have with me a letter from a firm of local estate agents, valuers and surveyors that was written to one of my constituents — Mrs. Dulleston, of 57 William Green road, Wednesbury — as long ago as July 1985. In the letter, the company, Shipley Cameron, states: 665
The vast majority of all Building Societies are not now entertaining applications for Smith-type houses and this obviously seriously affects their sale price.That, perhaps, ranks as the understatement of that year, but it is true now as it was then. As a result of meetings that were held about that time — I know that you, Madam Deputy Speaker, were responsible for convening them, and both of us spoke at them—it was suggested by some owners of these properties that some discreet pressure might be applied by the Government to building societies to make them look sympathetically at the plight of those who were considering applying for mortgages for houses of that type. As long ago as 1985, the estate agents Shipley Cameron referred to that suggestion:It has been suggested that Government pressure may be brought to bear discreetly on Building Societies to take a lenient view of the Smith-type construction when considering mortgage finance. I feel that this attitude is rather naive because, as I have mentioned before, Building Societies have a duty of responsibility to their investing members to act wisely. Furthermore, I must underline that Building Society Valuers, upon whose advice the Building Society advance mortgage monies, will be concerned about any possible future negligence claims having recommended a house for mortgage finance with potential structural defects.Not much prospect is held out there, but there was one optimistic note in the letter:If, however, the properties are included in the list of defective houses under the Housing Defects Act of 1984, the problem should resolve itself insomuch that Purchasers, Building Societies, and their valuers will have some protection, against potential defects in Law.Until such time as this happens I have to tell you that your property is virtually unsaleable and I, together with my colleagues in my Profession, await to see how the situation resolves itself.Thanks in no small part to the campaign that you, Madam Deputy Speaker, and I and other colleagues in the borough of Sandwell waged, and the efforts of Members from other parts of the country, Smith houses have been included in the list under the 1984 Act. However, that has brought little comfort to your constituents or mine, Madam Deputy Speaker, because the shoddy tale of prevarication on the part of the Government has continued, although one must admit that it has been consistent with their political philosophy. Ministers continue to vaunt the private enterprise philosophy and to adopt the principle that the weakest go to the wall when unfortunate individuals such as my constituents try private enterprise and fail. At a recent meeting in Sandwell to discuss the cost of repair of dwellings of this type, an estimate of £20,000 per dwelling was given. On that basis, repairs to Smith properties in Sandwell alone will cost nearly £6 million. The Minister will no doubt remind us that the Government recently allocated a further £388,000 in addition to the figure mentioned earlier for the current year, but that is intended to cover all similar defective properties.It should be recalled that potential purchasers of such properties are usually first-time buyers with little deposit money and requiring maximum mortgage facilities. It may be argued that if the original purchaser had had a proper structural survey carried out at the time of purchase, the defects might have been revealed. However, there was no legal requirement to spend several hundred pounds on such a survey and it is understandable that people purchasing from a local authority a property in which they had lived trouble-free for some years did not think it necessary to embark on the extra expense of a full structural survey.
666 The additional £388,000 is scarcely generous. In the borough of Sandwell there are 3,354 properties of non-traditional construction, of which 859 are Smith houses. In that situation, the Government's additional funding is a mere drop in the bucket and will go no way at all to meeting the understandable fears of owners of Smith houses or of the remaining tenants who live in these rapidly crumbling and less than palatial dwellings.
My point to the Minister is blunt, short and specific. When will the Government make adequate funds available so that councils such as mine can repair or repurchase those sort of dwellings? Councils have listened to enough funny words. They thought that they had won a major victory when they were included tinder the Housing Defects Act 1984. I am afraid that such inclusion is of no value unless some extra cash from the Government is forthcoming.
§ The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe)I am grateful to the hon. Member for West Bromwich, East (Mr. Snape) for giving us the opportunity to discuss these issues. My Department's officials met representatives of the Sandwell and Districts National Smiths PRC Owners Association earlier this year and I know that they found the meeting very useful. It gave them a clear picture of the problems of Smith owners nationally. The hon. Member has understandably focused on the problems of Smith houses in Sandwell today. However, I would like to take the opportunity to set out the background to the problem generally and to say something about how the housing defects legislation — now consolidated in the Housing Act 1985—was introduced to deal with it.
When the Building Research Establishment first discovered serious problems with the Airey-type house in 1981, and subsequently found that these problems also affected other prefabricated reinforced concrete houses designed before 1960, former tenants who had exercised their right to buy were faced with immediate problems of mortgageability and blight. We could have relied on the principle of caveat emptor and turned our backs on the problem.
However, we recognised that the Government had a responsibility to those owners who had bought in good faith from the public sector, in ignorance of the inherent defects and that they could not have foreseen these problems when they bought. They now find themselves in an impossible position.
We therefore introduced first the voluntary Airey scheme of assistance in response to the initial Airey problem. Then we brought in the more comprehensive scheme of assistance under the housing defects legislation. The Housing Defects Act 1984—as it was known before it was consolidated in the Housing Act—had all-party support in its passage through Parliament and it was welcomed as a generous scheme to owners. Smith houses were only recently brought within this legislation.
The Building Research Establishment was originally commissioned to study Smith houses at the time that the Act was going through Parliament. Its findings did not indicate that designation was warranted at that stage. The Smith house is built of large concrete blocks. Although it is another type of concrete house, it does not have the load-bearing reinforcement found in the PRC-type house. Some steel was placed in the blocks for handling purposes, 667 but it is structurally redundant. However, following further representations, particularly from Birmingham Members, as well as the hon. Member for West Bromwich, West (Miss Boothroyd), we asked the BRE to look further at Smith houses in Sandwell. It found vertical splitting and cracking, caused by deterioration of the steel handling reinforcement bars in the concrete blocks. This could ultimately threaten structural stability.
We considered these findings, and other information on loss in values and so on. We concluded that we should designate nationally. My hon. Friend the Member for Oxford, East (Mr. Patten) announced this on 19 December 1985. Smith houses were formally designated on 1 May 1986. We also made sure that, when the national designation was made, this would not rule out additional problems found in the foundations at Smith houses in Sandwell. We did this by holding back national designation of the handling bar defect, to give authorities, like Sandwell, time to make local designations to cover the foundation problem.
We always made it clear that we were prepared to look at this matter if new evidence came to light and, when it did, we recognised the very real problems facing Smith owners. We should not overlook this when we discuss some of the particular problems raised by the hon. Member today, and which I know are worrying Smith owners.
Eligible owners are entitled to a 90 per cent. local authority grant to reinstate the property, or 100 per cent. grant in financial hardship cases. Where repair is not possible or is not economic, assistance will still be available by repurchase at 95 per cent. of the defect-free value in relation to both the Smith handling bar defect and the foundation defect.
As to reinstatement under the Act, we are now making good progress on approved repair methods. The National House Building Council's subsiduary, PRC Homes Ltd., has approved 38 repair systems covering 10 designated house types and 24 more schemes are in the pipeline. These approved methods cover over two thirds of designated houses in private ownership. Last autumn, we increased the grant expenditure limits for most of the designated house types, including Smith. The new limit for Smith is £20,000 to deal with the handling bar defect. Where houses in Sandwell also suffer from the use of shale in foundations, owners are entitled to a further grant of up to £14,000 to deal with that problem.
Repairs are now getting under way in many areas of the country. Over 2,000 properties have either been repaired or are currently in the process of repair under the PRC Homes Ltd. warranty scheme. This is what most of us hoped would happen when we brought in this legislation — we know that local authorities and owners want it too. That is not to say that we do not recognise some of the very real pressures facing some owners and their authorities.
As the hon. Member is aware, many Smith owners are anxious to know when they will receive the assistance to which they are entitled and what form that will take. All designations under the Act lay down a 10-year period of assistance, and owners will get their assistance during this period. We should all remember that the Act does not lay 668 down a timetable and the timing of any decisions on individual owners' applications is in the hands of the authority concerned.
That said, the Act does provide help for owners who need to move quickly, under the hardship provisions. These allow owners to claim assistance by repurchase if it would be unreasonable for them to await repair. Decisions on such cases are made at the local authority's discretion. We have given broad guidance in circulars to authorities on the kind of circumstances in which they might offer repurchase on hardship grounds. We look to local authorities to operate the Act in a reasonable way but, ultimately owners who are not satisfied with their council's decision can take the matter to the county court. We would hope that it would not come to this.
The hon. Member has raised the question of repair methods for Smith houses and has referred to delay in obtaining a licensed system. Although it has taken some time satisfactorily to resolve all the technical details, there are signs of some real progress here. A firm of repairers, W. G. Curtin, has submitted a Smith repair system to PRC Homes Ltd. for approval. We understand that this system has now been professionally appraised. We would hope that a licensed repair system for Smith houses will be available before very long. Obviously, Smith houses are somewhat different from PRC type houses and it is important that any repair method proposed meets the requirements of the Act. The repaired property must have an expected life of at least 30 years, and it must be generally accepted as mortageable for the purpose of the Act. That is why any repair system for Smith houses should be appraised carefully, so that the problem can be dealt with properly once and for all.
The grant expenditure limit for Smith houses was increased to £20,000 only last autumn. It is too early to say whether this will represent the average cost of repair, but the situation should become clear once a repair system has emerged.
I know that resources are of particular concern to the hon. Gentleman. The initial 1987–88 housing investment programme allocations were notified to local authorities in December last year. Sandwell received the second highest allocation among the local authorities in the west midlands region, and its estimate of expenditure this year is higher in real terms than that for each of the last two years. We generally expect authorities to be able to meet their obligations on housing defects grants or repurchase from within their normal housing programme resources—in other words, from their basic HIP allocation plus the prescribed proportion of capital receipts. In Sandwell's overall review of management, 1985–86, in the section on resources it says:
Almost any new initiative will cost money, but the Council is by no means short of it".The same report quoted substantial reserves in the region of £24 million. Interest alone on that sum would amount to at least £2 million per annum.However, £14 million extra HIP resources for 1987–88 were set aside nationally for authorities facing particularly high housing defects obligations in relation to the rest of their capital programmes. Sandwell was one of the many authorities to apply for an additional allocation, and in recognition of its particular problems it received an additional £388,000 — the third highest total figure among the claims from other authorities in the region.
§ Mr. SnapeI want to put two quick points as I understand the time factor. If Sandwell is such a rich authority, why are the Government, who are not renowned for chucking money at local authorities, granting a parsimonious but nevertheless extra amount of £388,000? Secondly, is the Minister aware that there are about 90 of these properties in my constituency alone, there are four times as many in the adjacent constituency of West Bromwich, West and there are plenty of others in the two Warley constituencies? Is it not a question of cash? Sandwell does not have that cash.
§ Mrs. RoeI have noted the hon. Gentleman's points. However, the Government have acted fairly towards Sandwell as well as towards many other authorities in this connection.
In conclusion, we are continuing to monitor the position. This year's round of HIP meetings should give my Department's regional office a valuable update. The precise pattern of expenditure under the Housing Defects Act 1984 is not easy to predict. Much depends on when owners apply, what form assistance is likely to take, taking account of the availability and like cost of repair methods, as well as any urgent hardship cases.
Even if large numbers of owners do apply, the cases, for many reasons, do not necessarily crystallise for some time. That is why my Department encourages local authorities and owners to co-operate and reach an agreement on a likely timetable for assistance. That should take full account of owners' needs as well as overall resource availability. We know of many areas where authorities and owners have agreed such programmes, for example, in Bristol, Epping Forest and Birmingham. We believe that, with good will all round, sensible programmes are achievable which are acceptable to all the parties involved.