HC Deb 15 May 1991 vol 191 cc401-8

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

11.42 pm
Mr. Graham Riddick (Colne Valley)

I am grateful to have this opportunity to raise a matter which I regard as thoroughly scandalous. The scandal is that my local council, Kirklees council, which is controlled by the Labour party, is wilfully depriving perhaps as many as 400 homeless people of the chance of being rehoused.

As a result of Kirklees council's non-co-operation with the housing association movement, the Housing Corporation has felt it necessary to withdraw some £4 million-worth of funding for housing associations within Kirklees this financial year. The council's decision to refuse to co-operate with the Housing Corporation can accurately be described only as spiteful and vindictive, based as it is on pure political dogma. The main losers are homeless people, the very people for whom the Labour party claims to care.

Let me give you some background information, Mr. Deputy Speaker. In 1989, the Jephson housing association applied to the Housing Corporation for approved landlord status under the tenants' choice scheme in all the 15 local authority areas in which it operated, which included Kirklees. As my hon. Friend the Minister will know better than I, under the tenants' choice scheme local authority tenants can apply for a change of landlord, but such a transfer can take place only if the majority of the tenants have voted for it. Therefore, to apply to be an approved landlord by no means automatically results in the approved landlord taking over local authority housing stocks.

Jephson wrote to Kirklees council, promising that it would make no unsolicited approaches to council tenants. That meant that, so long as Kirklees council provided a proper and decent service to its tenants, Jephson was unlikely to take over any of its housing stock. In spite of that, Kirklees council took exception to Jephson's application to become an approved landlord and withdrew all co-operation from the housing association.

None of the 14 other local authorities in which Jephson operated objected to its application to become an approved landlord. Jephson is no fly-by-night landlord but a well-respected housing association within the housing association movement. Last spring, it commissioned a poll —carried out by Birmingham university and National Opinion Polling—among its tenants to find out what they thought of how it was managing the housing stock. The vast majority of those tenants gave a clean bill of health to the Jephson housing association.

Kirklees council objected on purely ideological grounds. The socialist council believes that only it should run public housing and to hell with the wishes of tenants and homeless people in Kirklees if their needs conflict with the ideological dogma of the socialists.

The dispute continues to this day, despite the fact that everything that Jephson did was above board, within the law and with the support of the Housing Corporation. The Housing Corporation has attempted to resolve the problem, but has now lost patience with Kirklees council. It believes in working closely with local authorities, but, because of its poor relationship with Kirklees council, the grant to housing associations within Kirklees is some £4 million less than it would otherwise have been. It is certainly £4 million below what the housing needs index shows that Kirklees should receive in this financial year. It is receiving £8 million as opposed to the £12 million shown on the index.

The gainers are other councils in West Yorkshire, notably Leeds, which are prepared to co-operate with the Housing Corporation. A couple of years ago, the regional director of the Housing Corporation, Mr. Clark, said that the corporation had met more problems with Kirklees than any other council in the region. He said: Over the last four years Kirklees has lost £12m against the needs index for the district.

A local newspaper, the Huddersfield Daily Examiner, recently published a letter from a committee member of the West Yorkshire housing association, Mr. Coldwell, which also operates within Kirklees. He said that housing associations were in the business of providing housing at an affordable rate. He also said: I consider Kirklees' record on working with our association lamentable, to say the least. Time and time again Kirklees' bureaucracy has delayed our progress in providing homes for the homeless … For good luck to the homeless in Leeds read bad luck to the homeless in Kirklees. As Mr. Coldwell said in his letter, he is a member of the Labour party but is dismayed by the behaviour of Kirklees council in that matter.

I initiated this Adjournment debate to draw that thoroughly unsatisfactory situation to the attention of my hon. Friend the Minister and to ask him to see whether he can resolve it. In some ways it seems a little surprising that the Housing Corporation is able to withhold grant from a particular area. However, there is no doubt that this fiasco can be laid fairly and squarely at the door of the socialist council for refusing to co-operate with the housing association movement.

We hear Labour councillors going on about the problems of homelessness and the fact that councillors are not allowed to build new housing. The position in Kirklees shows as clearly as anything could do why some local authorities cannot be trusted with the responsibility of providing for housing needs.

Mrs. Elizabeth Peacock (Batley and Spen)

Is my hon. Friend aware that the Kirklees federation of tenants associations was telling council tenants that if they chose another landlord, they would not be eligible for housing benefit as it was provided just because they lived in Kirklees houses? Is it not disgraceful that an authority such as Kirklees, which is always saying that it has no money and no housing—I hope that next week my hon. Friend the Minister will see the condition of some of that housing—could lose £4 million that is desperately needed for housing? If the authority got its act together and co-operated, that money could be available for homeless people.

Mr. Riddick

I am grateful to my hon. Friend, and entirely agree with her comments. On her first point, it is absolutely right that Kirklees tenants should have an organisation to represent their views. However, it is reprehensible if the Kirklees federation of tenants associations is spreading scare stories that tenants would not be eligible for housing benefit if the council's housing stock was transferred to a housing association. The federation has a responsibility to ensure that the information that it provides to its members is accurate.

My hon. Friend's second point was absolutely correct. So often we hear Labour councillors in Kirklees and elsewhere complaining about the problems of homelessness. However, Kirklees councillors are responsible for denying the creation of places for perhaps 400 homeless people this year, which is unforgivable. I hope that my hon. Friend the Minister can do something about that.

Perhaps Kirklees council should be known as the £4 million council, because it has lost Kirklees homeless people £4 million in Housing Corporation grants. It has failed to claim £4 million from the utility companies because it has not carried out the appropriate repairs to excavations in the roads. There are £4 million of rent arrears outstanding in Kirklees.

The irony is that, as far as I am aware, no local authority tenants have taken advantage of the tenants' choice scheme since it was created a couple of years ago. Do the Government have any plans to make the tenants' choice scheme more popular? Like many hon. Members, I find that complaints about council houses rank high among the issues raised in my constituency surgeries and mail, but no tenants have opted to take advantage of the tenants' choice scheme.

Perhaps that is because the procedures involved are complicated, or because the National Federation of Housing Associations has effectively said that its members will not get involved unless the local authority is happy with such a proposal. Perhaps asssurances relating to security of tenure, rent and so on are insufficiently strong. Perhaps it is because the Kirklees federation of tenants associations, to which my hon. Friend the Member for Batley and Spen (Mrs. Peacock) referred, has been spreading misleading information. Perhaps it is simply because tenants are unaware of the opportunities provided by the tenants' choice scheme.

Whatever the reason for the lack of interest in the tenants' choice scheme, it would be well worth while the Government's looking at it again to see how it could be made more attractive to tenants. I am sure that it would be in the interests of some tenants to take advantage of the scheme, and I should be grateful if my hon. Friend the Minister would say what plans he has to promote the scheme. The scheme fits in perfectly with the Government's belief in empowering the consumers of public services, because it gives tenants the opportunity to decide how they wish their estates to be run.

However, despite the poor take-up of tenants' choice, there is clear evidence that the threat that tenants could choose alternative landlords has galvanised some local authorities into improving the quality of service provided to their tenants. That is a welcome development.

I hope that my hon. Friend the Minister will be able to respond positively so as to give hope to homeless people in Kirklees and the chance of greater choice to council house tenants.

11.54 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Tim Yeo)

I congratulate my hon. Friend the Member for Colne Valley (Mr. Riddick) on gaining the opportunity of raising this important issue. My hon. Friend is a robust champion of the interests and rights of tenants in his constituency and of those who would like to become tenants there.

I fully support the firm stance that the Housing Corporation has taken in this case. It seems to me that Kirklees borough council has acted less than responsibly in its refusal to work either with a reputable housing association, such as Jephson, or with the Housing Corporation itself. My sympathy, like that of my hon. Friend lies with the council's tenants and with those people in Kirklees who are in housing need. Both have suffered as a consequence of the council's actions.

I was also shocked by the disclosures of my hon. Friend the Member for Batley and Spen (Mrs. Peacock) about the misleading scare stories being put about, and about the threat that housing benefit might not be available to tenants who make a particular choice. I very much look forward to my visit to that part of the world shortly, when I hope to see for myself the housing conditions there.

As my hon. Friend the Member for Colne Valley has explained, the dispute arose because of a decision by the local authority to withdraw from negotiations for the disposal of land to the Jephson housing association. Why did the council withdraw its support? Simply because Jephson had applied to the Housing Corporation for approved landlord status under the tenants' choice legislation. I understand that the council made no formal objection to Jephson's application at the time. It chose instead to break off negotiations that would have led to the provision of new housing stock by the association. By its action, Kirklees was not only seeking to deprive its own tenants of their legal right to exercise tenants' choice, but was putting an obstacle in the way of the provision by Jephson of some much-needed new housing in the area.

As the House is aware, tenants' choice gives most public sector tenants the right to change their landlord without moving from their existing homes. Tenants consider tenants' choice for many reasons, but mostly because they are dissatisfied with the service that they receive and want to see it improved—surely a fundamental right of every tenant. The aim of the scheme is first and foremost a better service for tenants. This can certainly be achieved by a change of landlord.

Just as important, however, as my hon. Friend said, the mere possibility of that change, and therefore the prospect of competition, also has an impact on local authority performance. We know that tenants' choice has spurred many local authorities to look again at the services that they provide for their tenants. It has concentrated their minds wonderfully on reforming housing management and paying more attention to what their customers want. There is evidence, for example, that the spur of competition has been a real boost to tenant consultation and estate-based management. Local authorities are now, at last, keen to know what their tenants think. Attitude surveys, once conducted by 5 per cent. of authorities, have been conducted since 1988 by no fewer than 50 per cent. of them.

It is an important feature of the tenants' choice scheme that tenants should be able to transfer to a landlord of their choosing. Some tenants wish to explore setting up their own landlord organisation, but housing associations also are often considered. Their experience and expertise in the provision of social housing make them an obvious choice. Of the 23 landlords approved for tenants' choice so far, 19 are registered housing associations, and we are encouraging more to participate by making grants available to help them take forward the costly transfer proceedings.

Many associations, however, are discouraged from becoming involved in tenants' choice because of the hostile attitude of local authorities such as Kirklees. Some authorities have threatened withdrawal of co-operation from housing associations which become involved in tenants' choice, but none except Kirklees has actually done so. My Department and the Housing Corporation take a very serious view of the action of Kirklees.

It is important for housing associations to have close working relationships with local authorities, but it is not acceptable for a local authority to seek to undermine the independence of the association and prevent tenants from exercising their statutory rights under tenants' choice. Why did Kirklees seek to do exactly that? I can only assume that Kirklees sought to oppose tenants' choice generally, and Jephson in particular, because it was afraid of the competition.

In tenants' choice, all potential new landlords must apply to the Housing Corporation for approval, as Jephson did, before any transfer application can be made. The corporation lays down stringent criteria concerning financial viability, experience of housing management and commitment to the provision of housing for those on low incomes. Potential landlords can apply for specific approval, relating to particular property or estates, or for general approval.

Jephson applied for general approval to enable it to be ready to pursue a tenants' choice transfer should tenants in the area wish it to do so. Jephson assured the council that it would not approach tenants, but would respond only to tenants who approached it and agreed not to proceed with a transfer in the face of reasonable opposition from the local authority nor to proceed unless a majority of tenants voting, voted in favour. That seems more reasonable. However, without any consultation with the Housing Corporation, Kirklees decided to deny support to the Jephson housing association, withdrawing from site sales that were then at an advanced stage and refusing to supply sites to the association in future.

The Housing Corporation asked the council to reconsider its action, but, I am sorry to say, to no avail. As a result, not only has the council refused to have dealings with the Jephson housing association, but it has effectively broken off relations with the Housing Corporation. Despite repeated attempts by the corporation's regional office to persuade the council to reconsider, there has been no formal council response to the corporation's requests since August 1989, when the corporation's regional director addressed the council's housing committee on the Jephson issue. A result of that, and of the poor performance of the council's programmes, is that Kirklees has received a lower allocation for Housing Association schemes funded by the corporation than might otherwise have been expected.

Although the Government are involved in decisions about the regional allocation of the Housing Corporation's approved development programme, the distribution of resources within the regions is a matter for the corporation's own regional offices. At national level, distribution to the regions is made principally in accordance with the housing needs indicator, or HNI, an objective measurement of need, reviewed each year by the Government, the Housing Corporation and the National Federation of Housing Associations. For statistical reasons, however, the HNI is less reliable in assessing the incidence of need at a more local level, and considerable reliance is placed on the judgment and local knowledge of the corporation's regional offices.

In the north-east region, 50 per cent. of the resources are distributed according to the HNI scores of local authority areas, and 50 per cent. at the discretion of the regional offices. This mirrors the Government's own practice in distributing housing resources to local authorities, using the generalised needs index.

In order to improve the management of its capital programme, the north-east region, like the corporation's other regions, has been introducing a system of allocating resources to housing associations on the basis of three-year programmes for each local authority area. These are drawn up in discussion with housing associations and local authorities. The region is particularly keen to co-ordinate the use of its own resources with those of local authorities and others in order to maximise the impact of its programmes. Kirklees's refusal to have any contact with the corporation has meant that the corporation has been unable to prepare a three-year strategy for the area, in the way that it has been able to do with the other four local authorities in West Yorkshire. As a consequence, the corporation's allocation for housing association schemes in Kirklees this year, a total of £8.126 million for rented housing, is substantially below what the area might otherwise have received.

Regrettably, this is not a new occurrence. For some years, allocations to the Kirklees district have been lower than the corporation would have liked, reflecting a poor performance by the local authority in promoting and facilitating housing association schemes in its area. What is particularly unfortunate about the dispute that erupted in 1989 is that, in the preceding two years, the corporation had been working closely with officers of the council to improve the programme of activity by housing associations in the area. While other authorities had a clear view and strategy, it was not always apparent what Kirklees wanted housing associations to do in its area. This situation had begun to improve, even though there continued to be problems in getting schemes off the ground.

The reduced allocation does not mean that the corporation has turned a blind eye to the evidence of housing need in Kirklees. I should like to quote from the letter which the corporation's regional director wrote to the chief executive of Kirklees on 22 April, announcing this year's allocation. It says: The Housing Corporation is fully aware that the housing needs in Kirklees are some of the most severe in the region. We are still very anxious to see that our investment goes some way to alleviating the housing need and environmental problems of the district. The fact that we are unable to give a full allocation to the Authority is a source of great concern to us, as it must be to you. We would be very unhappy for this situation to continue for a further full year. The director went on to stress the importance of re-opening the dialogue between the corporation and the officers and members of Kirklees. I believe that that letter makes it clear, as my hon. Friend said, that responsibility for the break down in dialogue lies firmly, clearly and solely with Kirklees council. For its part, the Housing Corporation has demonstrated its keenness to co-operate.

I urge Kirklees borough council to lift its ban on the Jephson housing association and to resume relations with the Housing Corporation. The corporation is now the main provider of new subsidised housing. In his autumn statement, my right hon. Friend the Chancellor of the Exchequer announced that its funding would be increased from £1.1 billion in 1990–91 to over £2 billion in 1993–94; in the current year it stands at £1.6 billion. Over the next three years, housing associations are expected to complete around 100,000 corporation-funded dwellings, and from next year onwards the corporation will be approving new projects at the rate of around 45,000 units a year.

Close liaison with the Housing Corporation is essential, if local authorities are to be able to fulfil their new enabling role. In the past, too many authorities have been content to remain the monopoly providers of low-cost housing for rent. Like most monopolies, that has worked against the interests of the customer. Too many authorities have in the past shown themselves to be insensitive to the needs of their tenants and inefficient in the management of their stock. The enabling role is more difficult and more challenging. Authorities must be thoroughly informed of the needs in their area, perhaps more so than in the past. They must maintain a close working relationship with other providers, including the Housing Corporation, housing associations and private developers. If they fulfil their role properly, the result will be more choice, more variety and a more efficient service to people in housing need.

It is not enough merely to demonstrate need. Local authorities must show themselves capable of co-operating with other agencies to find the best means of meeting that need. Otherwise, we should simply waste resources that could be put to better use elsewhere. We must not lose sight of the ultimate aim, which is to help those in housing need and improve the service already provided to those living in subsidised housing.

I urge the members of Kirklees council to consider the effects that their attitude is having not only on the council's tenants, but on those who would benefit from an agreed strategy for the provision of new housing association stock in the area. They should lift their ban on the Jephson housing association and reopen discussions with the Housing Corporation. No one is benefiting from the present state of affairs. As my hon. Friend has said clearly, many people are losing directly as a result of the obstinate attitude of the Kirklees borough council. A great deal could be cone if the council were more co-operative.

Finally, let me say how pleased I am to hear my hon. Friend speak so positively about the tenants' choice scheme. It is true that transfers under the scheme have been slow to make progress, and I share my hon. Friend's disappointment about that. The risk of antagonising local authorities, as the Kirklees case illustrates, is undoubtedly one of the factors making some housing associations wary of participating in the scheme. The procedures involved are long and complex, as they have to be to deal effectively with a transfer contested by a hostile local authority.

The time taken to achieve progress is, however, in some ways understandable. From the tenants' points of view, a decision to change to a new landlord is one not to be taken lightly, and tenants rightly need time to consider all the issues involved. The terms and conditions of their tenancies on transfer, for example, which can be broadly comparable with their existing secure tenancies, need to be carefully examined. But some 70 or so tenant groups up and down the country are talking to the Housing Corporation about the scheme, and some are now making good progress towards transfer. Four of them have reached formal application stage and I am hoping to see some transfers achieved in the reasonably near future.

In the meantime, as my hon. Friend has suggested, we have been considering ways of speeding up progress and encouraging greater participation. We have agreed with the Housing Corporation that grants should be available to registered housing associations to help with the costs of the transfer process, and that resources generally should be targeted on schemes that have real prospects of success. The Housing Corporation is, of course, continuing its work of publicising the scheme to ensure that all tenants are fully aware of the opportunities that tenants' choice offers. As I have said, the vital point about the scheme is that these opportunities exist and bring an element of real competition into local authority provision, which is the best guarantee of good housing management and services that tenants can have.

The tenants and the people of Colne Valley and of Batley and Spen are well served by the way in which my hon. Friends have raised this important subject and exposed the deplorable attitude of the Labour council in Kirklees. I hope that their arguments and my remarks in reply will be properly noted by tenants, prospective tenants and by all the voters in those constituencies, and that they will see who is championing their interests and who is doing the opposite.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Twelve o'clock.