§ Mr. Geoffrey Lofthouse (Pontefract and Castleford)
I am grateful for an opportunity to raise the problems of the housing crisis in Wakefield. No doubt local authorities in other parts of the country face similar crises. I shall attempt to be as factual and constructive as I can and to put the points of which I have been advised as I understand them.
Wakefield metropolitan district council's housing committee recently approved a five-year strategic local housing plan, which has the stated intention of providing an effective, efficient and caring service to people living in both public and private sector accommodation—paying particular attention to those having special needs and to maintaining a commitment to equal opportunity.
Wakefield will be confronted by a major problem in the immediate future, in the form of insufficient resources with which to provide a housing service that will adequately meet demand. Even Wakefield—a local authority which efficiently provides services, as is demonstrated by its performance indicators being far better than average; its voids are only 1.1 per cent. of stock, and its arrears are only 2.5 per cent. of debit—needs adequate resources if it is to be effective.
Wakefield's public and private housing stock will continue to deteriorate unless the controls that prevent its metropolitan district council from raising the finance to fund necessary investment are relaxed. For many years, Wakefield managed without subsidy or resorting to general rate fund contributions. The full costs of the public sector housing service have been met by the rent income from the authority's tenants.
The last 10 years have seen a decline in the number of new-build dwellings and since 1988 no new schemes have been incorporated in Wakefield's capital programme. As many as 1,000 dwellings have been sold at a discount under the right-to-buy arrangements, and the total stock now available for letting is 20 per cent. less than 10 years ago. That has resulted in a waiting list numbering 12,300. Of those applicants, 77 per cent. require rehousing, not merely transfers, and 34 per cent. require accommodation for the elderly.
Ten years ago, young couples living in lodgings and on the waiting list for council accommodation could have expected an offer within two months. Currently, young couples starting out in life, single parents and families living in lodgings, face a wait of 12 to 18 months. There is a definite need for more single-person accommodation. As new-build schemes are totally unaffordable, family houses are having to be converted in an attempt to ease the problem, but that initiative only scratches the surface.
Will this country for ever have to live with a reputation for having young people who must live in cardboard boxes or in temporary hostel accommodation? A problem that was once confined to the capital, is now spreading throughout the country. Wakefield is attempting to follow the guidelines to work with other bodies and associations. However, can we expect housing associations to build 1,000 houses per year for rent at an affordable price?
Wakefield is at the centre of a mining and industrial area which has experienced unprecedented reductions in the work force in recent years. With more than 60 per cent. of tenants in receipt of housing benefit, many families and 560 young people dare not take the risk of a long-term mortgage liability, even if they could afford the repayments at present.
Wakefield gives an annual revenue cash support to the housing association which took over ex-British Coal properties, which were being auctioned off over the heads of the existing tenants. These properties have been neglected for so many years by British Coal that they now need a programme of structural and environmental improvements, which will have to be undertaken from the ever-reducing housing investment programme allocation.
The new capital controls and the use of capital receipts have meant more restrictions on the resources available, resulting in an investment in 1990–91 which is only half that of 1989–90. The amount of capital investment for the public sector is a mere £150 per dwelling, which, as hon. Members will appreciate, does not go far these days.
Persistent lack of definite housing investment programme allocations and changes in the use of prescribed capital receipts has meant considering alternative ways to maintain reasonable housing conditions by improving the housing stock. Such cuts have certainly affected the council's ability to carry out full-scale housing improvements. Although properties are maintained to a reasonable standard, many thousands of post-war properties built in the 1950s and 1960s lack modern up-to-date fixtures and fittings. The council has had to reduce the standard of improvements to two basic elements: the provision of central heating and window replacements with draught-sealing qualities.
This year the Government withdrew subsidy under the grants system for aids and adaptations for disabled tenants in the public sector. Last year, of the 4,580 referrals for adaptation work, 1,067—23 per cent.—were for public sector tenants. With ever-increasing demand for this service, such expenditure now takes one sixth of the admissible basic HIP allocation.
The council has a statutory acquisition obligation. The statutory acquisition of designated defective pre-cast, reinforced dwellings continues seriously to affect the council's resources. In the Wakefield area, 172 pre-cast reinforced properties have been sold by British Coal and to date 97 of these properties have been purchased by the council, plus 182 which were previously in council ownership. Nearly one sixth of the council's basic HIP allocation is spent on acquisition of PRC dwellings.
Although Estate Action funding gives local authorities the chance to bid for extra resources, we must recognise that 50 per cent. of the capital cost still has to be found by the council from within its own resources. That leads to high capital investment in one small sector of the housing stock, to the detriment of other properties which are deteriorating through lack of investment. While it may resolve the problems on one estate, others are queuing up behind. The whole question of funding Estate Action projects requires review, so that 100 per cent. of the cost is supported by supplementary credit approvals.
Like all other authorities, we also have the problem of care in the community, as those initiatives have to be pursued, despite the deferral of the Government's proposals. Wakefield has within its boundaries two major regional resources—a hospital for the mentally ill and one for the mentally handicapped—which are discharging long-term patients into the community. The local council, the local health authority and housing associations are for 561 ever attempting to find the resources to cater for the need to provide accommodation and the supervision that is necessary for such clients.
The new financial regime that controls subsidy paid to the housing revenue account will ensure that rent increases are in line with the Government's guidelines and more, owing to the inadequate inflation provision of a mere 5.5 per cent. for management and maintenance. Such rent increases will be necessary without any improvement in services. In 1991–92, the tenants of Wakefield, who are not receiving housing benefit, will probably be contributing to the rebate for their neighbours who are.
The lack of housing investment does not only affect the public sector. Following an expensive appraisal of the district's older housing stock, the council embarked, in 1979, on a 10-year improvement programme, with 82 general improvement areas proposed. Some 11 years later, with the strategy only half complete, owing to massive cuts in local authority housing finance, the council has been forced to re-evaluate the condition of the older housing stock to take account of the substantial changes contained in the Local Government and Housing Act 1989.
The council has also made a significant commitment to continue its area improvement programme, and has recently completed its first neighbourhood renewal assessment, as required by circular 6/90, before considering the declaration of renewal areas. The survey relates to 3,000 pre-1919 properties; it studied not only housing conditions but the socio-economic status of the local households. It revealed that 2,672 properties—80 per cent. of the total—needed extensive repairs, while 1,925 —64 per cent.—were unfit for habitation. More than 30 per cent. of households in the area were in receipt of means-tested benefits; 56 per cent. of households had a net weekly income of below £150. Over 80 per cent. received less than the national average, while 15 per cent. contained people of pensionable age; 76 per cent. had no savings, or at best insignificant amounts.
It appears from the survey's detailed analysis that the council is required to invest some £50 million over the next 10 years if it is to provide decent homes for the local community into the 21st century. The staggering repair bill for that area alone must be seen in the context of other demands on the housing capital allocations.
I am well aware that the Minister recently visited Castleford, and, in particular, the Smawthorne review area, which is involved in the improvement programme. I understand that he saw the completion of the first neighbourhood renewal assessment at Smawthorne. The council is now embarking on a major reassessment of its area renewal programme. It is estimated that 15,000 homes in the district need substantial repairs, that 2,500 properties lack basic amenities and that 4,300 are statutorily unfit—although that may well be an underestimate now.
Given the amount of unfitness revealed by the survey, it is estimated that a staggering £250 million—at least—will need to be invested to preserve the fabric of Wakefield's old housing stock. Like many other authorities, Wakefield faces the problem of houses in multiple occupation—HMOs. During 1989, the council carried out a detailed HMO stock condition survey, which revealed that many people were living in the most squalid conditions imaginable. Eighty-four per cent. of properties lack adequate means of escape in case of fire; 32 per cent. were considered unfit for habitation; 80 per cent. lack 562 adequate sanitary and washing facilities; 84 per cent. were not in a satisfactory state of repair; 66 per cent. of tenants experienced difficulties in persuading landlords to carry out repairs, and 40 per cent. of properties failed to comply with the HMO management regulations.
Such property houses many elderly, single and vulnerable members of society. Their number is growing at an alarming rate, due to the inadequacy of alternative accommodation provided for vulnerable groups by socially responsible landlords.
In response to the growing housing crisis, the council has developed a housing aid service. It provides information, advice and advocacy on a wide range of housing matters. Use of the housing aid centre has risen consistently and dramatically since it opened. The combined effects of the Housing Act 1988, the Social Security Act 1986, the recent benefit changes, the introduction of the poll tax and the Government's high interest rate policy continue to have a serious impact on the local community, as reflected in the use of the centre.
Between April 1989 and March 1990, the housing aid service dealt with the following problems: 1,535 benefit inquiries, 376 cases of debt counselling, 322 cases of harassment and illegal eviction, 917 people looking for accommodation, 243 cases of relationship breakdowns, 728 mortgage problem cases and 874 cases relating to security of tenure. Many of those cases are the direct result of the Government's policy to deregulate rents and high interest rates.
The housing aid centre also dealt with 598 cases of homelessness and 917 cases of people looking for accommodation. The vast majority of them come from non-priority groups. They are mainly single people who are destined to end up sleeping rough or living in squalid conditions in multi-occupied properties. I never thought that I would live to see the day when people in my constituency had to face such conditions. When I left the Wakefield metropolitan district council in 1978, having been its housing chairman, people could expect to get accommodation within two months of making an application. During the last 10 years, the outlook has deteriorated to the extent that I have described.
The council has reacted positively to the new grants system. More than 1,000 inquiries were received during the first six months. Given the resources available for house renovation grants, the problem has become insoluble. Under the new income assessment procedure, 52 per cent. of all households assessed had a nil contribution to make. That highlights the low incomes and the poverty faced by many people in the district. In total, 80 per cent. make contributions of less than £2,000. With average repair costs approaching only £10,000, it makes economic sense to preserve communities by providing warm, dry, well-repaired and affordable homes. However, a considerable burden has been placed on the council by its overall housing allocation.
The means test for grants poses its own problems in many cases. Many people, particularly the elderly, resent the intrusive questions associated with the tests and refuse to give the information required. In addition, the means test takes no account of existing housing costs. Many households, in particular young, first-time buyers, are advised that their contribution will be substantially above what they can afford. The Government must change their policy now and target sufficient resources not only on 563 people but on property when the council considers that comprehensive rehabilitation of its older housing stock is necessary.
I gave the Minister notice of the contents of my speech, so he will be familiar with it. I shall therefore omit some of the points that I intended to make, if the Minister will reply in writing to them.
The 1991–92 HIP allocation for Wakefield of only £11.14 million is inadequate to meet the Department's indicative spending amounts of £6.4 million for public sector borrowing, £500,000 for housing association work and £6.8 million for grant-eligible works. That makes a total of £13.7 million, yet the 25 per cent. use of capital receipts is reducing because tenants fear high mortgage rates. Capital income is reducing because few houses are being sold.
I recognise that no Government have a bottomless pit of money, but the shocking deterioration in our housing stock in the past 10 years cannot be met and put right overnight. Will the Government examine the feasibility of allowing local authorities the freedom to raise finance on the open market, similar to housing associations? I accept that the Government will never provide adequate resources to meet demand, but will they merely relax the controls to allow local authorities to use their own initiatives and resources to resolve the problem?
If not, will the Minister say how Wakefield can provide a service that meets the needs and demands of 40,000 tenants, 8,000 potential tenants and owners and private-sector tenants who have a right to decent accommodation?
Only yesterday, it was announced that the crime rate in West Yorkshire has increased by 20 per cent. Although I do not condone that or place all the blame at the door of the housing problem, when people get desperate and have nowhere to put their head down they are attracted to petty crime. I hope that the Minister will appreciate that point.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tim Yeo)
I congratulate the hon. Member for Pontefract and Castleford (Mr. Lofthouse) on his success in obtaining the debate and on the forcefulness with which he put his points.
One of my first duties, three days after taking up my post, was to visit the hon. Gentleman's constituency and to launch Wakefield council's area regeneration project at Smawthorne, which is one of the first in the country. I received a warm and friendly welcome from the council and the people of Wakefield and, despite the brevity of my visit, I was able to see many positive things happening in his constituency.
I was sorry, therefore, that the hon. Gentleman chose to paint a rather pessimistic picture of housing in Wakefield district. That did less than justice to the efforts of the local authority in tackling some of the problems. I am grateful to him for notifying me yesterday of the points that he would make today, which I shall try to deal with in the nine minues that he has left me. I dare say that it will be possible to write to him about the points that I cannot cover.
One of the hon. Gentleman's main arguments was that the resources for the district are inadequate to allow it to 564 undertake everything that it felt it should be doing. It is rare for any authority to feel that it has sufficient resources to do everything that it would like.
Taking up the suggestion that the hon. Gentleman made at the end of his speech, I am afraid that an open-ended policy on local authority borrowing would do nothing to ensure that spending resulted in good value for money. It would certainly be contrary to the Government's long-standing commitment to control public spending and reduce inflation.
My hon. Friend the Minister for Housing and Planning recently announced a housing investment programme allocation for Wakefield of £11,104,000 for next year, compared with £10,517,000 for the current year and £5,235,000 for 1989–90. The increase in allocation between 1989–90 and 1990–91 reflects the requirement under the new financial regime that local authorities should set aside a proportion of their capital receipts against debt. It also reflects the greater targeting allowed by the revised capital control system and by the Government's ability to take into account in their calculations a proportion of the usable capital receipts available to authorities. I note that Wakefield's expenditure in 1989–90 was approximately double that of 1988–89, mainly because of the use of accumulated capital receipts. Although expenditure in the current year is expected to fall back from that peak, I hope that the surge in spending in 1989–90 has alleviated some of the housing problems that now require attention.
It is also open to the council to propose schemes for improvements to the stock on estates which could attract additional funding from our expanded and highly successful Estate Action programme, which now stands at £268 million. Success here could release funds for the council to use elsewhere, but, unfortunately, it appears that Wakefield has not so far felt able to put forward bids to the extent that one might expect, given the housing needs to which the hon. Gentleman referred. Over the past five years, Wakefield has attracted only £2.371 million, 3.1 per cent. of the regional total.
A further source of funding is the current energy efficiency initiative, which will provide up to £10 million in the next financial year and £50 million in the following one towards worthwhile schemes put forward by local authorities. My regional office has recently written to the authorities to invite bids.
It is also possible for an authority to utilise the useable proportion of its in-year and accumulated receipts, as it sees fit. In addition, it can make contributions to its capital spending programme from its revenue income. An obvious source of such income would be its rents, which, in the case of Wakefield, are somewhat below the current regional average.
One of the features of the new capital control system is that a proportion of all local authority receipts should be set aside against existing or future debts. It is right that some provision should be made out of the proceeds of sales of local authority assets for the debts incurred in their original acquisition or purchase. This limitation also gives Ministers the opportunity to take into account in the housing investment programme the receipts which authorities obtain in areas where housing needs are less pressing. Those resources can be recycled to areas, such as the north of England, where they are most needed.
The hon. Member eloquently set out his anxiety about homelessness in the Wakefield district. I can assure him 565 that the Government, too, are anxious about homelessness. It is in the major cities, and especially in the pressure areas of London and the south-east, that homelessness presents the most serious difficulties.
None the less, I can understand councils elsewhere being worried about the problem of homelessness, especially where families with young children are involved. I applaud those councils who are prepared to use their expertise and their imagination in tackling it. I commend Wakefield's record in avoiding the need to house families in bed-and-breakfast accommodation. I know that Wakefield is keen to see more hostel accommodation provided and is prepared to work with the housing association movement to achieve that end. Nor is it only with hostels that housing associations can help. This year has seen the Housing Corporation's resources increase yet again; and they are expected to continue to do so for some time. My hon. Friend the Minister for Housing and Planning recently announced that the corporation's gross expenditure for 1993–94 is expected to exceed £2 billion, a 65 per cent. increase over the current year.
Local authorities have, for some time, been encouraged to adopt a more entrepreneurial and enabling role towards housing provision. With their ability to offer financial assistance to private landlords, including housing associations, and their capacity to assemble land for housing purposes, local authorities have an unrivalled opportunity to influence the future of housing in their area.
Housing associations are now even better placed than ever before to make a significant contribution to meeting the needs of the homeless. To do this they can obtain assistance from local authorities, in the form of cheap or free land or through grants of one sort or another, with funding from the Housing Corporation and from their own sources of private sector finance.
The Housing Corporation recently announced its intention that 50 per cent. of the general needs housing developments which it funds should be targeted to dealing with homelessness problems. Together, the housing 566 association movement and well managed and go-ahead local housing authorities should be capable of filling any gap left by the main private rented and owner occupied sectors. In this respect, I commend Wakefield for the positive way in which it took on the task of supporting a housing association in maintaining former British Coal properties in productive use.
Another problem that Wakefield has consistently drawn to our attention is the condition of its private sector stock. There is no doubt that, although not facing the worst problems in the region, the council has to deal with some difficult problems. In this area, the new renovation grants system should be welcomed. The complexities and restrictions of the old system have been swept aside. A test of resources now helps to ensure that grants are targeted to those people most in need of assistance.
Wakefield has also expressed concern about the problems that the council faces because of the high demand for renovation grants which local authorities are under a duty to pay where an applicant is an owner-occupier living in unfit property. The council has applied to the Department for a supplementary credit approval to assist it in finding the resources to pay such grants. That bid, together with those from other authorities, is currently being assessed and a decision will be taken as soon as possible.
Wakefield is also at the forefront of activity in the new area renewal categories and should be applauded for its willingness to take on the task of preparing and declaring the Smawthorne area. It is worth noting here that the council received an undertaking from the Department to provide resource cover of up to £555,000 subject to the relevant works being undertaken.
I am pleased to see Wakefield's initiative in setting up its housing aid service, which will be of inestimable value to the public and to the council.
The opportunities for a committed local authority such as Wakefield to use its expertise should enable it to meet the needs of all those who must look for social rented accommodation in the area.