Housing Management (Hansard, 29 June 1994)

§ 11. Mr. Robert Banks
To ask the Secretary of State for the Environment if he will make a statement about his plans for the application of compulsory competitive tendering to housing management.

§ Sir George Young
The order extending compulsory competitive tendering to housing management came into force on 23 June. The first contracts are due to be in place on 1 April 1996.

§ Mr. Banks
May I express my full support for the introduction by my right hon. Friend of compulsory competitive tendering by local authorities in the management of their housing stock, in spite of the opposition from those on the Opposition Benches, given that that policy will benefit the tenants, in the better quality of the services that they will obtain, and the council tax payers, who will achieve a better deal for the money that they have to give to local authorities? Can my right hon. Friend give us any examples of the voluntary introduction of that policy by local authorities and the benefits that have accrued?

§ Sir George Young
My hon. Friend is right to summarise the objectives, which are to have a higher standard of management and a better quality of service. As to the economies that have already been secured from CCT, I was interested to see a survey, published today by the London borough of Wandsworth, analysing the five-year savings from competitive tendering—an average saving of 32 per cent. There are real benefits to be gained from that policy.

§ Mr. Gerrard
The Government estimate the preparatory costs of CCT in housing management at 10 per cent. of the contract, which is obviously a substantial amount of money. Can the Minister justify the requirement that that money be taken from housing revenue accounts, which means that existing tenants must pay for it from their rents?

§ Sir George Young
It is relatively easy to justify that. There is an initial up-front cost of 10 per cent., but there are average annual savings of 6 per cent, so the policy pays for itself in a very short time.

§ Mr. Nicholas Winterton
Will my right hon. Friend, who is visiting Macclesfield borough tomorrow to attend the opening of a development by the Templar Housing Society Ltd., of which I happen to be a member, accept that borough councils can be extremely efficient and responsible housing management services, and does he accept that it is not necessary for housing management to be put into the private sector for the tenants of public sector housing to have a first-class management service, as they have in Macclesfield borough?

§ Sir George Young
I am looking forward with mounting excitement to my visit to the north-west tomorrow. As to my hon. Friend's point, the efficient local authorities are perfectly able to put in for the contracts that are being advertised and if, as my hon. Friend says, they are efficient and competent, they have every prospect of winning that contract and going on to perform the services that they have performed so well.