HC Deb 27 July 1988 vol 138 cc521-6

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

11.12 pm
Sir Geoffrey Finsberg (Hampstead and Highgate)

This is only the second Adjournment debate that I have had in 18 years, which is a signal of how very angry I am at the way in which the London borough of Camden has been operating the right-to-buy scheme, and my extreme unhappiness about the way in which the Department of the Environment has been trying to permit my constituents to operate within the law.

I welcome my hon. Friend the Minister to his first debate on this subject. I hope that he will spare the House and me details of how the right to buy operates and concentrate on telling me why the Department has been so unwilling to help my constituents, and to implement our Act of Parliament. With my right hon. and learned Friend the Member for Tunbridge Wells (Sir P. Mayhew), I had a hand in drafting the legislation, and we included measures to be used against recalcitrant authorities. I am a little puzzled to know why my successors have been unwilling to follow our example. For example, Norwich council would not operate the right to buy. It took us to court and lost, and we did not need to take over its functions.

The London borough of Camden has, from the beginning, expressed its outright opposition to the right to buy. In May 1987, it made this very clear by removing official right-to-buy leaflets from the shelves in all its libraries. My hon. Friend the then Minister for Housing, Urban Affairs and Construction warned that he would send a task force of Government commissioners to sell council houses unless the hard Left toed the line. That was in May 1987 and after that Camden turned to dumb insolence and pretended to let the scheme operate. For example, one member of staff was doing all the work. It refused to sent out right-to-buy forms to tenants who asked for them and told those tenants that they had to call for them. I have already said that those forms were not available in the libraries. I circumvented that by obtaining a stock of them, which were available at my advice bureau. However, it was not my job to do that; that is what the council should have done.

The council also used other ways to put off its tenants from buying. It inflated service charges, but, fortunately, the Government have changed that part of the law. My hon. Friend the Member for Hendon, South (Mr. Marshall)—I do not blame him for his absence at this late hour—has some Camden properties in his constituency. He has been most active on behalf of those Camden tenants and he managed to make Camden offer an even more extraordinary reason for the delay than usual. It told him that it cannot define the correct boundaries of a particular property. I am sad to say that, in correspondence, the Department was apparently willing to accept that that was possible and that it was an acceptable reason.

Whenever tenants inquire about valuations or anything else they are told of massive delays. I have been receiving monthly performance, or lack of performance, figures, and at the end of June there were 1,884 overdue section 125 notices. I do not believe that the Department should ever have permitted that.

When tenants have bought their properties, the council has got back at them. It charges those people a higher rent than council tenants for the use of a garage. In some cases there is a £6 differential in such rents. I appreciate that, under present legislation, the Government can do nothing about that. Such practices, however, put off tenants from buying.

Alas, when I have drawn such cases to the attention of the Department, it has been rather slack about taking action. First, it summoned the leader and chief executive of Camden and wrote to me to say that it had met representatives of that borough on 14 May. Camden promised to put positive proposals before the Department. By August, Camden had not even recruited the staff, but it offered "news" in September. After further pressure from the Department, it was forced to employ 19 extra staff, but it took as long as was decently possible before appointing them—they were not all in post by November. My hon. Friend should note that, because of the Departments attitude, Camden got an extra six months' grace before complying with the legislation.

I asked the Department whether it would make Camden put conveyancing and valuations out to the private sector, but the answer was, alas, no. Even now, when I draw attention to individual cases, the Departments attitude is less than urgent. I informed the Department about a complaint that I had received from a constituent in Lissenden gardens. In March 1988 the London regional housing division wrote to Camden about that and said: Bearing in mind that your authority is under a statutory obligation to issue an offer notice within 8 weeks of the admittance of the right to buy (or 12 weeks in the case of a leasehold sale) I am to say that Ministers are concerned at the delay that is occurring in this case. In the circumstances, I would be pleased if you could let me have your detailed comments on this matter, together with your best estimate of a date by which you now expeet to despatch an offer notice. I should be grateful for an early reply to this letter. When someone is in statutory breach, one should ask for a reply within seven working days and not for an early reply to this letter. It took the Minister six weeks to fix another meeting with the leader of Camden council. Camden is laughing behind my hon. Friend's back and behind the back of the Government. Its message to me is, "Your Government are doing nothing," but I know that the Government will catch up with it. I hope that my hon. Friend will be able to tell me that nemesis has caught up with it. My hon. Friend does not have to face tenants week after week in his advice bureau. Five or six come to each of my surgeries complaining that they have to pay £40, £50 or £60 a week in rent when that money should be set off against their mortgages.

All the letters tell me that the purchase price is fixed at the date of application. That is marvellous, but many of my constituents have paid out hundreds of pounds in rent that they would not have had to pay if the Department had been willing to act more swiftly. As tenants grow one or two years older and their cases become one or two years out of date, mortgages become less easy to deal with. Now, after a certain amount of pressure from me, the Government say that they will introduce an amendment in another place to the effect that if, after a certain period, the council is in default, the rent will be set towards the purchase price. The Government are not even prepared to backdate that to Second Reading. They are producing a lawyer's paradise—almost a page-and-a-half schedule of notice and counter-notice which not even I, who helped draft the original legislation, am sure I understand.

I ask my hon. Friend, who is new to his responsibilities, to put this schedule in workmanlike English and to simplify it to state that, if a property has not been sold by a certain date, or if the council has not complied with the statutory requirement, rent will automatically be set against purchase price unless the council can prove that it should not be. It should not be up to my constituents to serve notices on Camden; they have done that. It is up to Camden to comply with the law.

A greater difficulty has now arisen, and I ask my hon. Friend to recognise it. The Finance (No. 2) Bill provides that tax relief on purchases not completed by 1 August will operate on the property, not the people involved—unless they are husband and wife. Two sisters in my constituency were purchasing a property from Camden. Because Camden would not comply by 1 August, they ran the real risk of losing half the tax benefit that they should have had. Fortunately, they had a good solicitor, who has prepared a document that will satisfy the Inland Revenue, but there must be hundreds of such cases—I note that the Law Society is concerned about them—of people who will lose because Camden and other local authorities are failing to comply with the law.

I ask my hon. Friend to take this up with the Treasury. The Finance (No. 2) Bill cannot be amended now, but the Revenue should be persuaded to produce an extra-statutory concession to cover people whose only fault is that they happen to be buying from the London borough of Camden. I bet there are people in a similar position in Islington, Lambeth and Hackney, all of whose councils are defying the law and getting away with it.

I am sorry for being more vehement than my hon. Friend might have liked, but I have reached the end of my tether. I ask my hon. Friend to tell Camden that it has four weeks—or two months—in which to get its act together. I said earlier that there are 1,800 section 125 notices. They are valuations, and my hon. Friend could force Camden to go outside to have them done. The conveyancing could be done by outside solicitors. If Camden does not dramatically reduce the number of cases pending in the time stipulated, my hon. Friend should use the powers provided in the right-to-buy Act to take over the council's functions. I remind my hon. Friend that it will cost the Department more to carry out those functions. Then perhaps an action for surcharge could be taken out against the council by the district auditor. That would double the threat.

Secondly, I ask my hon. Friend not to allow the new schedule and the notice and counter-notice to set rent against purchase price stay in their present gobbledegook form. I apologise again for keeping my hon. Friend the Minister here late tonight, but this is a matter of real anxiety to many of my constituents.

11.24pm

The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier)

It is essential that I should at the outset pay tribute to the assiduous way in which my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) has represented his con-stituents seeking to exercise their right to buy. Many of them, I know, suffered enormous frustration as a result of the shortcomings in Camden's performance, which my hon. Friend has so ably described. They could have no more determined champion. He has corresponded with Ministers regularly on this matter, both on behalf of individual constituents and more generally.

My hon. Friend's complaint is that Camden's performance in carrying out its right-to-buy responsibilities has been woefully inadequate, and that can hardly be disputed. Camden is one of the 11 authorities whose right-to-buy performance is formally monitored by the Department so that we can keep a regular check on its performance. The evidence of the figures suggests that the council has not been dealing with applications at a rate anything like sufficient to ensure that its tenants applying to exercise their right to buy are able to do so reasonably speedily.

There are two stages in the right-to-buy process for which statutory time limits are laid down and, rather than indulge in explaining the right-to-buy legislation, which my hon. Friend urged me not to do, it is important that I should explain precisely what that procedure is, so that I can explain how bad Camden has been.

The first stage is the landlord's notice admitting or denying the tenant's right to buy. That must normally be served within four weeks of the tenant's claim to exercise his right to buy and is not complex for the landlord in the vast majority of cases. Yet in May 1987, when Camden had virtually ceased issuing notices, there were over 800 cases where it had not complied with the statutory time limit.

However, I am glad to say that the latest report shows that there were no cases in which the first notice had not been served by the due date. Therefore, it is clear that the intensive lobby that my hon. Friend has mounted, and the way in which Department of the Environment Ministers have responded, have had that effect already.

The other stage for which there is a statutory time limit is the service of an offer notice under section 125 of the Housing Act 1985, giving the landlord's opinion of the price at which the tenant is entitled to buy. That must also include a statement of known structural defects and, in the case of a leasehold sale, details of service charges payable including binding estimates for repair and improvement costs in the first five years of the lease. The landlord has eight weeks in the case of a freehold sale and 12 weeks in the case of a leasehold sale to prepare that, starting from the date at which the tenant's right to buy is admitted.

The number of cases in which Camden council has not met that deadline has been rising alarmingly in recent months and is currently almost 1,900. The rate at which Camden issues offer notices has increased—I shall say more about that later—but not by nearly enough to match the increased number of applications.

We know from complaints passed on by my hon. Friend, and those that we receive direct from his constituents or others, that there are also delays in completing the legal formalities leading to sale when a tenant has decided to continue with his purchase on the basis of an offer notice. Statistics are less easy to interpret, since delays may be attributable to a variety of causes, some ascribable to the tenant, some to the landlord.

However, at the end of June there were 665 cases where completion was awaited, against an average this year of about 22 sales a month.

Against that background, I can understand my hon. Friend's wish that my right hon. Friend the Secretary of State should use his powers to take over Camden's role in processing sales, and I shall return to that specific point later.

It may well be that Camden is not the only authority in London whose performance in handling right-to-buy sales is less than satisfactory, but in numerical terms, the problems in Camden seem to be the most acute. All the evidence reflects that. A number of inner London boroughs have had difficulty in handling right-to-buy applications over the past 18 months. A major factor in that has been a substantial increase in the number of applications received. The number of applications by Camden tenants was, on average, 79 a month in 1986. That rose to 165 a month in January 1987, no doubt due in part to the higher discounts introduced in January 1987 for those buying flats under the right-to-buy. The trend has continued into 1988. The average monthly number of applications so far is 281, with 467 received in June alone. The Government are delighted that so many people are expressing an interest in becoming home owners. However, the number of applications is not easy to predict, and it is hard for local authorities to adjust to such an increase overnight when staff are scarce. I understand that.

I shall turn now to the steps that Camden council has taken in the past year to try to improve its performance. As my hon. Friend is aware, these have had some, albeit limited, success. Following a meeting to discuss the council's right-to-buy performance held last July, the council informed us that 19 additional posts were to be approved with the intention that the output of section 125 offer notices would increase to between 120 and 140 a month once they were filled. Those additional posts were approved, we were told, against a background of reductions in staffing and funding in other areas of the council's responsibility from which the right to buy was protected.

The council's output did begin to improve as the additional posts were filled. The number of offer notices issued in any month did not exceed 20 between February and September 1987, and has never been below 72 since. The council now seems to have reached its target of 140 notices a month promised last year. Greater central co-ordination, helped by additional staff, seems to be at the root of the improvement. I understand that the council's valuer and estates surveyor took on overall responsibility for right-to-buy matters in September 1987.

At a meeting earlier this week, the leader of the council acknowledged that the improvements delivered by the council were not sufficient to keep pace with the larger numbers of applications now being received, but said that the rate is over three times that in 1986. He said that the council is now considering proposals to establish a central unit of administrators devoted to right-to-buy work and that that would involve some extra staffing. It was expected that that should enable the output of offer notices to be increased to some 180 a month well before the end of the year—possibly more if a greater number of those involved in right-to-buy work could be located in the same building.

That is a significant increase. However, it is clearly not sufficient if applications continue to be received at the present level. The leader therefore agreed that, in the light of the trends in applications in the autumn, the council will also consider whether further staff resources for right-to-buy work are necessary in the medium and longer term.

It is clearly important that the council should make the best possible use of existing resources, as well as devoting more to the right to buy. The leader said that there was no obstacle to staff working overtime on a voluntary basis and that the council was making every effort. The leader did not rule out the use of the private sector, for example in conveyancing, where that would help.

The leader has confirmed—he is prepared to be quoted —that it is the council's policy to fulfil its statutory obligations. That needs to go on record. He also pointed to the fact that additional staff resources had been devoted to the right to buy at a time of reductions elsewhere He also stressed—this is something that I welcome—that the council was dependent on the capital receipts from housing sales to maintain its repair programme. Against that background, he gave assurances that the case for extra staff would be considered urgently if the proposed reorganisation did not prove adequate.

The Department will continue to receive monthly progress reports from the council and will keep in contact with it over the steps it is taking, so that the Secretary of State can review the possible use of his powers of intervention. I shall give my hon. Friend a clear undertaking. It is abundantly clear to me, as it will be to him, that, if the situation does not improve in the short term, we should have no alternative but to use those powers.

My hon. Friend is, of course, primarily concerned about his constituents who have suffered unconscionable delay. I remind him, if I need to, that the amendments to the Housing Bill were designed to meet his concerns and those of many other hon. Friends on that issue.

I hope that my hon. Friend will welcome the specific points that I have made and the assurance that I have given him. Although I took on these additional responsibilities only some 24 hours ago, I am nevertheless aware of his grave concern about this matter. I have enormous sympathy for the points that he has raised and am grateful to him for the additional information that he has supplied in the debate.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes to Twelve O'clock.