Housing and Urban Development Bill [Money] (Hansard, 3 November 1992)

§ Mr. Simon Hughes (Southwark and Bermondsey)
I shall detain the House briefly [HON. MEMBERS: "Hear, hear".] Conservative Members will have to be tolerant tonight—a lot may depend on it—[Interruption.]

§ Madam Deputy Speaker (Dame Janet Fookes)
Order. May we have a little more quiet so that we can hear the hon. Member?

§ Mr. Hughes
My influence may be greater tonight than for a long time to come.
I must comment on the funding arrangements proposed in the resolution, as they affect urban development and housing aspects of the Bill, from my constituency experience.
First, when we grant aid money from central Government to carry out the purpose of a Bill, as the money resolution enables us to do, the procedure is fairly hit and miss. When a Bill states in its explanatory memorandum, as this one does, that The Bill has financial effects for both central and local government and continues to set them out, it would be better if we quantified them more accurately. One of the consistent complaints about the way in which central Government and Parliament fund the activities of local government and quangos—such as the proposed urban regeneration agency—is that we impose duties on them without necessarily giving adequate funding to carry them out.
I fear that that may be the case with the Bill. I have alerted Ministers that I should be grateful of a specific — [Interruption.]

§ Madam Deputy Speaker
Order. I am sorry to interrupt, but there is a buzz of conversation in the Chamber, which is discourteous to the hon. Gentleman. If people want to talk, perhaps they will move out of the Chamber.

§ Mr. Hughes
It would be helpful if Ministers could make clear to us—perhaps by correspondence, which could be circulated also to all the other parties—as soon as possible, their assessment of the real costs of the two types of activity provided for in the Bill—housing and the urban regeneration agency.
In the notes to the Bill, on page iv it is stated: 252 Sales under rent to mortgage … will lead to some increase in administrative expenditure for local authorities, but will also yield capital receipts and reduce their expenditure on repairs and maintenance. It would be helpful if at some stage the Minister would give his best estimate of what that increase in expenditure will be and what the net cost will be, remembering that it assumes that there will be capital receipts and reduced repairs and maintenance expenditure. From the figures given by the Secretary of State relating to the precedent in Scotland, there have been few—only about 500—rents—to mortgage transactions, so that will not yield substantial capital receipts, even by a generous definition.
There is a provision to the effect that the right to a mortgage is repealed, and it is said, in relation to the financial consequence of that, that the repeal is likely to have limited financial effects because receipts will increase as people will not be able to claim the mortgage and will not be asking for that money from local authorities. It would be helpful to know, first, how many people have so far exercised their right to a mortgage and, secondly, what the saving will be from the proposed reduction.
The final part of that provision proposes the abolition of the shared ownership lease as an option. That would appear to have minimal, if any, financial consequences, although it appears in the financial part of the measure. May we be told the estimate of that?
More important in terms of the implications of what is proposed are the points in the following paragraph of the explanatory and financial memorandum about the financial implications for the taxpayer. There is to be a new right—to—repair scheme and a right to compensate secure tenants for home improvements. The memorandum says that the responsibility for the payment of those matters will rest with the local authority.
Any local authority, of whatever political colour and those with independent councillors in control, will want to know that it will not be out of pocket and will not be asked for money from its secure tenants which will not be refunded by Government. It will represent an additional liability on them without that assurance. May we be assured that the moneys will be provided not just this year but continuingly? It is no good the Government saying that the matter can be left to the public expenditure round because, as we know, at that stage cuts are made even though the duties remain.
In the same paragraph of the memorandum is a provision relating to the delegation of housing management. That provision is welcome, particularly for a constituency such as mine, in which getting on for 80 per cent. of the electorate live in council properties. It will not be welcome in its entirety if the costs will fall on local authorities to the detriment of their other responsibilities, such as repairs and maintenance. Those seeking estate management boards, tenant management co-operatives and other bodies will want to know that the money will be available to make them work, and not on the cheap.
The memorandum then says: There will be nil effect on public expenditure of restoring statutory authority for the payment of annual loan charge contributions towards the expenditure which local housing authorities have incurred on defective housing. That sounds wonderful in theory, but it would help if the Government would set out how they come to that conclusion.
The urban regeneration agency, it is said, 253 will be funded by central government grant in aid"; and several parts of the money resolution relate to that funding. We are told that the URA will take over responsibility for three existing central government programmes"; and we are told—it is a dangerous word, and we should take warning signals—that it will adopt a more focused approach". Focused approaches, like targeted spending, normally mean less money.
Constituencies such as mine, other areas of the docklands, and areas where there have been urban development corporations are specifically concerned that, if urban development is to happen through the offices of an urban development agency, moneys expended need to be guaranteed beyond the existence of that agency, particularly if it is contemplated that the responsibilities will be handed over to local councils.
The Bill contains a power to allow the Government, by order of Parliament, to return parts of urban development corporation areas to local authorities. I am concerned that the funding commitment undertaken by urban development corporations will not be continued in the funding of any new local authority arrangement, which would have practical implications for housing repairs, the voluntary sector, transport improvements and so on.
May I flag up now that, unless the money is sufficient —not just while the urban regeneration agency and urban development corporations exist, but beyond—there will be substantial risk to the positive net benefit to urban communities such as mine. Rather, they will be looking for money that they are not given, and the effect on urban communities will be not regeneration but degeneration.
I am grateful for the time of the House. Those are important matters to hard-pressed authorities such as mine, but particularly to the people who rely on the Government to be fair in the money which they give for the tasks that the Bill proposes.

§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)
I shall do my best to be helpful to the hon. Member for Southwark and Bermondsey (Mr. Hughes). As he said, the financial implications of the measures are clearly set out in the financial and explanatory memorandum.
Part I of the Bill relates to leasehold reforms, which essentially involve the transfer of assets between private individuals. As such, they will not have a significant effect on central Government or local authority spending. The parties involved will have the right to refer disputes over eligibility to the county court and over terms to the local leasehold valuation tribunal. That is likely to lead to a slight increase in the workload of those two bodies.
On part II of the Bill, the hon. Member for Southwark and Bermondsey is right to say that the administrative cost 254 of sales under rent to mortgage, and the payment of compensation to tenants for home improvements, will fall on local authorities, but we estimate that the net effect on local authority spending will be minimal. Likewise, we believe that the other provisions in part II will have no, or negligible, public spending implications. As the hon. Gentleman raised a number of specific points, the fair way for me to deal with the matter is for me to respond to him in writing about how we have estimated those costs.
Part III of the Bill will establish the urban regeneration agency as a non-departmental public body funded by central Government grant-in-aid. The agency's budget will subsume three existing programmes: English Estates, derelict land grant and city grant. The English Estates element will include the programme in coalfield areas announced by my right hon. Friend the President of the Board of Trade. The agency will also be expected to attract substantial amounts of private sector investment into areas in need of regeneration.
A key feature of the URA will be that it will break down the divisions between the component programmes, thus eliminating duplication and ensuring the best possible use of resources. Again, as the hon. Gentleman raised several specific points about year-on-year funding of the urban regeneration agency, I shall respond to him in writing.