§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
§ 10 pm
§ Mr. Jeff Rooker (Birmingham, Perry Barr)
I am grateful to Madam Speaker for allowing me to raise the issue of urban and private sector housing renewal.
On Tuesday this week, Birmingham city council's urban renewal committee reported to the full councilThat the Committee's inability to reduce the backlog of Mandatory Grant Inquiries with existing resources is a serious source of concern. That the backlog of inquiries in December was over 9,000. That the Urban Renewal Division is receiving an increasing number of applications which have to be dealt with in six months and that this is adversely affecting the planned grant programme which is based upon date order inquiry.I intend to spell out what is behind that concern, using my own words and information that I have gathered from many sources around the city, for which I take full responsibility.
I shall draw attention to the need for a major policy change in the way in which we fund urban renewal; although I shall concentrate on my constituency of Perry Barr and the city of Birmingham, I am aware that what I shall say applies to virtually all inner-city areas in our great conurbations.
Of course we have a resource problem; it would be futile to ignore it. The scale of that problem is clear from, for instance, the existence of 9,500 inquiries about urban renewal grants in the city of Birmingham. If only half those qualify and the average is £10,000, that will mean £47 million. Birmingham's housing investment allocation for the whole city—for private, council and housing association homes—is only £38 million.
It goes without saying that I believe that we are not investing enough. I shall not insult the Minister by spending time on an issue with which I understand he cannot deal, but I hope that he can deal with the reallocation of current funding. Let me explain why I think that he should act as quickly as possible.
Following the Local Government and Housing Act 1989, a new concept of urban renewal was introduced involving renewal area schemes and a new right to a mandatory renovation grant for poor owner-occupiers. Birmingham—always at the forefront of quality urban renewal—declared four renewal areas in 1991, that in central Handsworth being in my constituency. It has drawn up a 10-year programme to deal with the physical, social and economic aspects of community life rather than dealing only with housing, as did the old system of housing action areas.
My constituency is the largest in Birmingham. Three of its wards—Oscott, Perry Barr and Kingstanding—are in the outer city, and were farmland 70 years ago. Handsworth, my inner-city ward, contains housing more than 100 years old. About a third of that ward was designated a renewal area. It contains 2,800 dwellings, 95 per cent. of which are in private ownership—that is, owned by the occupiers.
In 1991, 82 per cent. were either unfit for occupation or qualified for relevant works, and 54 per cent. of residents were in receipt of means-tested or unemployment benefit. The ethnic mix, measured by head of household, is as follows: 44 per cent. are white, 23 per 556 cent. black and 25 per cent. Asian. Obviously, the figures for the population are slightly different—31 per cent., 21 per cent. and 44 per cent. respectively.
Central Handsworth, therefore, well met the criteria for a renewal area. It is a goodly sized area, a vast number of people there are on means-tested unemployment benefit, and a massive amount of housing is unfit and requires attention. I accept, of course, that poor owner-occupiers in poor-quality housing live elsewhere in that ward, but it is not possible to declare a bigger area that meets the criteria.
Area renewal—the concept of doing up whole roads and adjoining roads as part of urban renewal—has been tried and tested as the best means of improving the quality of life, including the health of residents. It is better than isolated, one-off house improvements, known in the trade as "pepper-potting". That may be okay for the householder concerned, but it does nothing to uplift an area and so encourage investment, economically and socially. Furthermore, if an area is not dealt with, it will eventually literally fall down or have to be pulled down, along with those pepper-potted improvements, so wasting an awful lot of public money.
Owner-occupiers have a responsibility to look after their homes, to maintain repair, and, where possible, to make use of the equity of the asset to assist in renewal. I wish a lot more could be done on that latter point.
Not all owner-occupiers are well off, as is shown by the figures that I gave earlier. However, there is a wider collective community responsibility to ensure that each generation passes on to the next the universal benefit of good-quality housing. Otherwise, we bequeath to future generations an horrendous position. Every house will virtually have to stand for between 3,000 and 4,000 years at the present rate of renewal and rebuild.
So what is the problem? After the first four years of the renewal scheme, I and the city council recognised substantial slippage in the programme. Not only have minor works ended, but, in the Handsworth renewal area, there has been an absence of community and economic development work, which was envisaged in the renewal area strategy. No work on industry or on the social side of the community has been undertaken.
In addition, the same roads and dwellings of my constituents have slipped off the end of recent annual programmes—for example, the remaining part of Crompton road, Hill grove, Leslie road, Willmore road and part of Wellington road. Many others are at risk. It will cause premature concern if I list them tonight, so I shall not do so.
Why is that so? Birmingham is the lead authority on urban renewal. We invented the concept of enveloping. In one year, some time ago now, when greater flexibility existed in the rules, the city council managed to secure externally more than 9,000 dwellings, although it did not do the work itself. By securing, I mean re-roofing and looking after the external part of those old properties, so that they would at least be standing and be fit and available for internal work at a later date. The urban renewal work of Birmingham is used as a model, not only in this country but abroad.
The reason for the problem is the mandatory renovation grant system. It applies to any dwelling that meets the unfitness standards, irrespective of where it is. in Birmingham, more than 9,500 current inquiries are taking 557 place in relation to renovation grants. Those inquiries, not applications, are in a queue that is based on date order—that is the way the city council decided to do it. The queue is being dealt with starting from before April 1991. There is almost a four-year queue. I am told that it might advance by two months in the summer, so slow progress is being made.
There is, however, systematic jumping of the queue in the city. That is wrecking the concept of area renewal. Application forms are freely and legally available. They are more than 30 pages long. The law allows for a fee for filling in forms, assessing the professional work involved, and obtaining the quotations for the work. At least three firms of private agents in the city—Lawrence and Wrightman, Herrington Associates and Independent John Woodcock—are operating via two firms of solicitors—Tyndallwoods and Millichip and Southall and Co.—in touting for business in the shape of the 10 per cent. fee.
That is legal, but I question whether it is fully decent and honest. It helps some poorer owners on a one-off, pepper-potting basis. At the moment, there are more than 250 applications from those firms, costing an average of £10,000 each per grant. That is £2.5 million of the urban renewal budget. It is completely unplanned, and totally unrelated to restoring areas or even parts of roads.
Once an application is accepted and agreed, the grant, by law, must be paid within six months or court action follows—when, of course, those legal firms will receive more money via legal aid. That is how the queue jumping works. It is fine for the individuals, but it is crucifying hundreds of poor families waiting in the renewal areas. Those firms of professionals will not be bothered if the dwellings are demolished later as a result of forced clearance. They will have received their fees, which, at 10 per cent., amount to £250,000 so far. They are legally helping a few, while conditions of large groups in planned renewal areas worsen.
I am told that the work claimed on the applications is well over the maximum of £20,000 per dwelling, because obviously those companies are claiming far more than the minimum amount of work. After checking by the city council and, I presume, negotiation, the average grant is, as I have said, working out at £10,000 a dwelling.
The city council is responsible for planning expenditure on the urban renewal budget and for making commitments to my constituents and others to the effect that, for example, next year the council will be able to deal with a road or two adjoining roads in a renewal area. However, such commitments are meaningless. The city council has no idea how many applications will arrive each week. Rumours abound that hundreds of applications, averaging £10,000 each, are in the pipeline.
In public expenditure terms, such dwellings cost more to work on than dwellings in the renewal areas, because, in the renewal areas, the city council can package a series of renovation grant applications from home owners into one large contract with a building company or companies, and reap the benefits of scale. That means that more poorer home owners can receive help. That is what I am about: I want more help for more poor home owners whose homes will last longer because the area will last.
I will not accept it from anyone that I am raising the case for stopping poor inner-city home owners receiving their lawful grants. The opposite is the case. I believe that 558 the agents and solicitors are attacking the rights of the majority of poorer home owners for their own commercial interest.
I am concerned about my community of constituents; I am not seeking political patronage from one-off, pepper-potted residents. To do anything else would be a betrayal of trust, and I am not in public life to betray the trust of my constituents. Regrettably, the operation of the mandatory grant system of the renovation grants allows it to be used for the purposes of political patronage in Birmingham.
The actions of the firms to which I have referred are sending out a powerful message about resource shortage, and they are presenting a stark contrast about their views on competing cases. In other words, they are not really bothered. The firms want the money for themselves, not social justice for the communities.
The system should not allow those with inside knowledge, who think they know how to play the game with public funds, to exploit others. That must be stopped. Furthermore—I choose my words with care—they are building up ethnic tensions in the city and creating social fragmentation. I will have none of this, and where I see it, I will seek to expose it here or in my constituency.
Somehow, the Minister and the Government, using the weapons and tools of this House, must break the link between the mandatory grant and the fitness standards. We could then move to meeting people's needs, both in the renewal areas and outside. We could use discretion over minor works, which we used to carry out in the past and which have been completely abandoned in my constituency due to the activities of the agents and solicitors to whom I have referred in the Sparkbrook, Ladywood and Small Heath areas of the city.
If we broke the link between the mandatory grant and the fitness standards, we would be able to offer residents single element grants outside the renewal areas for real items that would improve matters and stop residents worrying about their houses, such as a rewiring exercise or the replacement of that bad roof. Such work would have a major impact on their lives, without the need for major building works.
Another way out of the problem, but one which I would argue against, would be to reduce the maximum renovation grant, which is currently £20,000. It could be reduced to £5,000, as some have suggested, and the system could remain the same. However, that would not solve the problem of the systematic undermining of the concept of area renewal. I do not seek any other way in which to renew our great conurbations and our inner cities than on an area basis.
I also appreciate that there are at least two other factors at work, one being the grants for aids and adaptations for people with disabilities. Under community care, the transitional money is being well spent in the inner city and the outer areas of Birmingham. When that money is absorbed into the revenue support grant in the year after next, I am concerned that it may be lost. Therefore, to protect those grants, the money should be kept under the aegis of the Department of Health, rather than under the Department of the Environment.
All people, whether in the inner city or the outer city, want to be able to keep their independence with the onset of disability. Those grants should be met from a 559 ring-fenced budget and not be forced to compete with the urban renewal programmes, which are legitimate in their own right.
The other factor is more difficult to explain, but it must be placed on record, because it cannot be ignored. A full renovation grant should secure a 30-year life for a dwelling. Obviously, one must compare the grant with the value of the dwelling. In our inner cities, there is not an open market on house prices.
Since many members of ethnic minorities are understandably reluctant to move out to the suburbs because they fear—and receive—harassment and feel lonely away from their culture, and there are fewer suitable large houses to buy, they somehow find the money in their families to remain in the inner city. That creates a false market, in which house values are set higher than the properties are worth—therefore attracting larger grants.
That bodes ill for the future, especially if the Government fail to tackle the problem that I have raised and clearance returns on a large scale, because the false market will be exposed and rehousing made much more difficult for the families concerned.
A change in policy would make the existing money go further. It would prevent area renewal from being undermined, it would prevent agents and solicitors from wrecking the concept of area renewal, it would prevent the misuse of the current system as a potentially corrupt means of political patronage, and it would give more help to more poor home owners in our inner cities. I invite the Minister to address the core issue.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Robert B. Jones)
I congratulate the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on securing the debate, and on the helpful and informed way in which he has put his points. I found my visit to the university of Central England in his constituency and the work that it is doing to encourage cross-disciplinary teaching in the housing and construction sectors interesting and very impressive.
The debate is timely, because we are currently engaged in a review of the private housing renewal programme. In that context, I shall address the points that have been raised.
What is clear beyond any doubt is that many local authorities in the country are pursuing extensive and successful private sector renewal programmes. I have visited authorities, including Birmingham and Wolverhampton in the west midlands, which have been keen to outline their strategies for tackling disrepair in the private sector, and have been proud to show the resulting successful initiatives. Indeed, it is only two months since I visited areas in need of regeneration in Birmingham and had a useful discussion with partners and organisations involved in the urban care initiative. I also visited an area in the constituency of the hon. Member for Birmingham, Yardley (Ms Morris) at the same time.
I want to put in context the task facing local authorities. Most home owners are willing and able to maintain their own homes. Provisional estimates from the English house condition survey and family expenditure survey suggest that expenditure by households on improvements has increased significantly since 1986, with an estimate for 1991 in the region of £20 billion.
560 The 1991 English house condition survey showed real improvements in housing conditions between 1986 and 1991, with a reduction in the number of unfit dwellings and a reduction in average repair costs in the private sector. However, there were still about 1.1 million unfit dwellings in the private sector in 1991. Of those, we estimate that 460,000 are owned by people who are eligible for grants under the present criteria, with the remaining properties occupied by non-eligible owners, owned by private landlords, or empty. Within the population of eligible owner-occupiers, the estimated average cost of making "just fit" is £4,700, which is considerably less than the current renovation grant average of £9,000.
Our overall aim is to bring a decent home within the reach of every family. Provisions to make decent the privately owned homes of people who require works but cannot afford to do the works themselves are part of that policy. But the resources for that provision are not unlimited. There have to be priorities. We believe that local authorities should be helped to target resources on the worst-condition housing, having a close regard to minimum habitable conditions as represented by the statutory fitness standard.
Any activity should also focus on the poorest and most vulnerable households, taking account of ability to contribute or meet the cost of required works, thus ensuring that public money is available as a safety net and not as a source of cheap finance to enhance the value of a private asset.
Another priority is that local authorities should act strategically over an appropriate time frame, in line with their wider housing role, while allowing urgent intervention where necessary. That can currently be achieved through area-based renewal, to which I will return later. It is also a priority that the regime for assisting private sector renewal should be simple to understand and easy to administer.
When the Local Government and Housing Act 1989 was introduced, a range of mandatory and discretionary grants and delivery mechanisms were given to local authorities to help to improve the unfit stock. The duty on housing authorities to consider the condition of the housing stock in their areas once a year, the duty to take action in relation to unfit dwellings, the availability of mandatory grants to deal with unfit dwellings, and the powers for area-based improvements, were all seen as important parts of a overall approach. It was felt that, taken together, they would provide a wide range of options that would give local authorities the means of deciding their priorities for private sector renewal, while ensuring that those least able to help themselves were given some form of assistance.
In practice, local authorities have not had the level of freedom originally intended, mainly because the demand for mandatory grants has taken a greater proportion of the resources than expected and distorted the underlying strategic nature of the 1989 Act regime.
Local authorities have explained to me that, instead of carefully selecting the most appropriate course of action and programming improvements in a sensible way over a reasonable time scale, they are increasingly being forced to pepper-pot grants in response to demand. In those circumstances, it is difficult to maintain a coherent strategy reflecting a considered view of local priorities.
561 Those conflicting priorities were clearly set out in the consultation paper issued in 1993. No solution was offered, but a number of options for change both in the short term and in the longer term were explored. In the short term, we have reduced the grant ceiling for mandatory grants' to £20,000, with the aim of helping a greater number of people, either through increased numbers of grants or by freeing resources to enable local authorities to take strategic action.
Guidance issued to local authorities suggests that, where mandatory grants are awarded they should not necessarily be for works with a 30-year life. Rather, the authority should look with care at what is actually needed to make the property fit and not at what might be desirable in an ideal world. There should be close scrutiny of individual grant applications and adequate systems in place to ensure that the works specified are appropriate to the circumstances of each case.
In the longer term, the objective must remain to deliver help to those least able to help themselves. The issue facing us all is how that can be best achieved from the resources available. Many local authorities have been willing to share their thoughts with my Department, through responses to the consultation paper and also, more recently, at the housing investment programme meetings that I attended and my general visits to local housing authorities.
There has been no shortage of advocates, such as the hon. Member for Perry Barr, for the benefits of strategic renewal and of renewal areas in particular. It is clear that many feel that a greater benefit can be achieved by agreeing a co-ordinated approach to improving an area over time. Even with the current mandatory grant pressures, 52 local authorities have been able to declare 83 renewal areas, and have been continuing to do so at a rate of about 14 a year.
We are keen to see such broad-based area strategies for housing improvement. A renewal area can provide the means of improving the living conditions and the general amenities of an area through comprehensive and planned activity on housing, social, economic and environmental problems. It is a focus for concentrating public and private resources to maximum effect, and for encouraging the confidence of residents and of the private sector in the future of the area, thereby stimulating investment. It is important that, where possible, employment opportunities are maximised and the area is made a better and safer place in which to live.
As the hon. Gentleman has already told the House, the city of Birmingham seeks to maintain a balance between area-based and individual activity, targeting resources on the worst housing and the most disadvantaged people. As well as responding to applications for mandatory grants, it has therefore declared four renewal areas. One of those, Handsworth, is within the hon. Gentleman's constituency.
Like most larger authorities, Birmingham has found its ability to concentrate resources on such areas weakened because of the need to respond to mandatory grant applications throughout the city. When I visited Birmingham last year, the local authority made it clear that it would welcome greater freedom to enable it to pursue its renewal area strategy more actively. It regarded the abolition of mandatory grants as a price that both Birmingham and many other authorities would be willing 562 to pay to gain that freedom; we shall have to keep that in mind when making proposals following our review. Strategic activity should not, of course, exclude help to those who are in great need but whose homes are not within a renewal area—but the hon. Gentleman will understand that I am not yet in a position to suggest how that can best be arranged.
So far, I have concentrated on the mechanisms already available to local authorities to secure housing renewal, but I know that the hon. Gentleman takes the view that, where an authority wishes to clear unfit housing, a new approach could have considerable benefits in some areas. That would centre on the provision of a new grant in addition to the usual compensation payments to those whose properties had been demolished. The main objective would be to ensure that those owners had the resources necessary to purchase a new property in the same area. That would mean that close communities that might otherwise be disrupted by a clearance programme could stay together.
The hon. Gentleman first explained his views during the passage of the 1989 Act. The Government were happy to respond by agreeing to establish a pilot study so that the proposal could be fully researched. The study has been conducted over the past three years, in conjunction with the city council, in the South Saltley area of Birmingham. My understanding is that it resulted in 16 home owners taking up the offer of grant, and that the last of those moved into their new property late last year.
The final report from the research study team is expected soon. Clearly we shall want to consider the findings very carefully to determine whether there is a case for making such grant assistance more widely available. If there is, we shall need to decide what steps to take to provide for that. The hon. Gentleman will appreciate that, at this stage, I can only assure him that we shall try to reach a view as quickly as possible.
I know that the hon. Gentleman will also be pleased to know that an essential part of any future proposals for improving the grant regime will be the removal of potential opportunities for exploitation and abuse. They are few and far between, but it is important that they be removed where possible.
The hon. Gentleman also mentioned the pressures currently being exerted on some local authorities by solicitors working on behalf of applicants for mandatory grant. I am aware that that is becoming an issue in some parts of the country, and especially in Birmingham.
Solicitors perform a vital role in helping individuals to secure their legal rights, but there should be no need for them to become involved in the grant process. It is the responsibility of local authorities to adhere to the legislation and to meet their commitments within the resources available. Authorities' decisions on grant applications should be based on a full knowledge of the needs within their areas.
Therefore I cannot believe that it is helpful to have a solicitor pushing a particular grant applicant's case at the expense of other equally worthy applications. Although one would like to think that the solicitor is acting primarily in the interest of the grant applicants, the hon. Gentleman has suggested that, unfortunately, that is not always the case. In considering possible future changes, we shall aim to reduce the scope for the unnecessary involvement of lawyers.
563 Overall, it is essential for local authorities to ensure that grant-aided work on private sector housing secures the maximum benefit from the investment of public funds. I acknowledge that some local authorities are finding it increasingly difficult to meet the conflicting demands placed on them, but I know that most are maintaining 564 effective private sector renewal programmes. It will be important to ensure that any changes arising from the current review build on this good work.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Ten o'clock.