§ Mr. Clive Betts (Sheffield, Attercliffe)
I put on record what may be a technical interest, in that, whenever I refer to the need for additional resources for Sheffield city council, I am arguing not for resources for the organisation itself, but for resources that may be spent to the benefit of my constituents.
I am pleased to be able to raise this issue today. Before becoming a Member of Parliament, I spent 16 years on Sheffield city council, nine years of which were spent on the housing committee—of which I was chair for six years. I intend to address several matters. First, there is the requirement for new house building in Sheffield, which was set out by the city council in its strategy statement. More than 5,000 new homes are required by the turn of the century and it is estimated that about half those new homes should be provided in the rented sector at affordable rents because not all individuals can afford to buy their homes, whatever their aspirations may be.
There is a need for more money to be spent on improvements and repairs in older private sector housing. Again, the council strategy statement says that, on the latest estimate, 9,000 homes in the private sector in Sheffield are unfit. Some 900 people are on the waiting list for improvement grants.
In the council sector, there is a need for expenditure on repairs and improvements. There is a need to modernise all our inter-war property and a need for major refurbishment work on tower blocks. I do not have such tower blocks in my constituency, but I know that my hon. Friend the Member for Sheffield, Heeley (Mr. Michie), who is sitting beside me, has a number of tower blocks in need of refurbishment.
Work is needed on deck access blocks, although Sheffield has already done a lot of work on them. I think especially of the partial demolition and partial renovation of the Hyde Park scheme to which the then Minister, David Trippier, gave special approval as part of the package of facilities provided for the world student games. That was one housing benefit that came out of that event.
Work is also needed on basic improvements, such as the installation of central heating. The difficulty is that the city's housing investment programme of £30 million is totally inadequate to deal with that range of problems within a reasonable time scale.
We have in this case a local authority with an excellent track record of identifying and using all kinds of capital resources. Throughout the 1980s and 1990s, it has used all its housing investment programme and it has used other programmes such as the urban programme. It has frequently been given additional resources because it has been able to spend its money up to the limit and in a proper way.
The authority used prescribed receipts in the 1980s up to the maximum possible and it therefore developed very good planned maintenance programmes. In the 1980s, it installed almost 30,000 central heating schemes in local authority homes through a leasing arrangement. It developed a housing partnership scheme with local builders and housing associations which built more than 1,500 homes to rent. It used original techniques, such as the enveloping scheme which benefited 2,000 homes in 392 the private sector, which was followed by the use of the block grant scheme. That benefited 250 households in the private sector.
During the 1980s, perhaps in contrast with what was happening in some parts of the country and despite Government policy, Sheffield city council boosted its housing investment programme from about £20 million to about £100 million. That was a substantial increase to the benefit of local people. That was where much of Sheffield's expansion of capital development went.
Sheffield also pioneered many innovative measures in housing management. The area-based management scheme was introduced to devolve and decentralise arrangements, and area offices were built so that people could have access to housing services at a local level. A major consultation programme was introduced to ensure that tenants participated in the decisions being taken about their homes.
Tenants' associations were formally recognised, and a tenants' levy scheme—the only one of its kind still operating in this country—was introduced whereby, through their rents, tenants could pay a levy that was passed on to recognised local tenants' associations so that they could have a full and active involvement in what happened in their locality.
An official repairs scheme was introduced. It is interesting that, when I became a councillor in 1976, the majority of complaints in my surgery were about repairs. Now they are about the fact that people cannot get a home at all, and few complaints are about the repairs system operating in the city.
The problem is one of reduced resources; that is the key issue in this debate. Housing investment programme allocations were cut progressively throughout the 1980s and into the 1990s. At the same time, investment for housing associations and the housing action grant were reduced.
The Local Government and Housing Act 1989 meant that local authorities could no longer use non-prescribed receipts for planned maintenance schemes. That was a devastating blow because planned maintenance schemes were an efficient use of resources. Roofs were replaced, homes were rewired and windows were replaced. Maintaining the basic fabric of properties eventually saved money because less money had to be spent on responsive repairs.
The council embarked on a partnership scheme; again, that was an original idea and the scheme was the only one of its kind in the country. Some 1,500 new homes were built, but what did the Government do? They introduced specific legislation to stop such schemes. I remember sitting in a room in Sheffield town hall and signing the agreement for the scheme at 11.30 pm as the new legislation, which would stop such schemes, was coming into effect at midnight.
The council introduced a leasing scheme for central heating whereby tenants paid a rent increase to cover the cost. That was stopped as part of the Government's clamp-down on local authorities' right to borrow in various ways to improve their housing stock. It is nonsense that people who buy their council house can go to a gas company and can borrow money to have central heating put in from the financial institutions that were doing deals with Sheffield city council to put central heating in council houses through a leasing scheme. 393 One is good; the other, apparently, is bad. If it is investment in the private sector involving borrowing from private institutions, it is good. If the public sector borrows from the same private institutions and tenants pay a rent increase to cover the cost, apparently that is bad and should be stopped. That was nonsense, but it stopped a worthwhile programme in its tracks.
Nationally, the Government have cut housing investment by almost half since 1992. The figures I have given show that, since 1990, Sheffield's investment programme has been cut from £100 million to £30 million. That is the scale of the reduction. The problems have not lessened, but the resources to tackle them have.
The Government's belief that, if they stopped local authority building, the resources would go elsewhere was not true. The number of private homes started in Sheffield was about 800 a year throughout the 1980s. The figure has not risen since 1980. In the 1980s, housing associations developed about 400 homes a year; the figure was lower at the beginning of the 1980s, but similar to the figure for the end of the 1970s. It is simply a fact that local authority building has come to a complete standstill, whereas during the 1970s, Sheffield built more than 1,000 homes a year. As late as 1980, it built 1,200 homes.
I now turn to the problems in my constituency which reflect those across the city in many respects. There is a diversity of needs. We need new homes. We have an innovative project called the Attercliffe village project. Local housing associations, the local authority, local builders and the local community are working together and we have the prospect of building new homes.
The difficulty is that there is no housing action grant to support the housing association scheme, although it is hoped that English Partnerships may help. The project is brown-field development on contaminated land. It can be cleaned up, but there is a price because housing there is more expensive. However, it is housing relatively near the city centre which local people want. If we could develop a scheme that also involved local people training to build those homes, so that we could do something about the high unemployment in the Darnall area, that would be a bonus. We shall work hard at that, but so far we have not had the necessary Government support.
In another part of my constituency, which is nearly out in the countryside, what almost amounts to a new town is being built in the Mosborough area. My hon. Friend the Member for Heeley, who was chair of the planning committee, will remember the initial aspirations to build a balanced community there, with public and private sector housing. Of course that balance has gone, because only the private housing is being built. It is a shame that some green fields are being built on, when we ought to concentrate our investment on the brown-field sites—the disused industrial sites nearer the city centre. Again the balance is wrong, and we need to sort it out.
Many people who have moved to private housing in the Mosborough area say that they want their elderly parents to come and join them there—but where is the council housing and the housing association property for them to move to? All too often, it does not exist.
There is enormous demand in the council sector. There are 13,000 people wanting immediate housing on the waiting list in Sheffield, and there are now nearly 10 times 394 as many homelessness acceptances as there were in 1979. The right to buy has had a disproportionate effect on the number of rented properties in my constituency. In parts of my area, we have had the highest percentage use of right to buy in the city, and for some sorts of property there is a ten-year waiting list.
When one talks to housing officers in Sheffield, it is interesting to find out that although there is a great demand for some property, at the other end of the scale properties are becoming almost unlettable. People's aspirations have increased, and they also know that if they get into an unmodernised property without central heating, they will have little chance of getting a transfer out in the foreseeable future. With the current resources available, there is also little chance that the house will be modernised,
So people say, "We'll wait a bit; we'll wait for a modernised property." In this day and age, who wants to move into a home without central heating? There are still 15,000 such homes in Sheffield, and that is not acceptable in this country, as we move into the new century.
§ Mr. Bill Michie (Sheffield, Heeley)
There is a logjam in all housing authorities nowadays. Because of the lack of investment, many families and single people are in the wrong properties. We are not building new housing, which would give them a choice, so we are left with people in three-bedroomed houses who could do with only two bedrooms. Unless we get some new build, that anomaly will remain for years to come.
§ Mr. Betts
My hon. Friend is right; in certain parts of the city there are shortages of larger properties for larger families, of properties for disabled people and elderly people, and of various other sorts of specialist housing.
All the time there is the feeling that the clamp-down on local authority housing resources is worsening the quality of the housing stock. The Government's policy of always talking down council housing and local authorities leads to such property being stigmatised and treated as a form of "welfare housing", rather than as an alternative form of tenure.
In my constituency there are estates of good quality houses built to Bevan standards in the 1950s, such as Ballifield, Thornbridge and Base Green. Although the houses are basically good, they need investment in improvements such as central heating. After 40 years, the metal windows in the houses in the Hackenthorpe estate are rotting and decaying, and they need replacing. People deserve better than that.
A delegation came to me from the flats in Richmond road. The old-age pensioners there look at the condensation running down their windows and the rotting frames, and know that there is no money to replace them. That is not acceptable. In the 1980s we used non-proscribed receipts for planned maintenance schemes to rectify such problems.
The city council has been imaginative. It has put in for Government schemes such as estate action and single regeneration budgets, and has been successful. We are not pushing Government schemes, or any other help that is offered, to one side; we simply say that that help is not sufficient.
In the private sector we have a major renewal project in the Darnall area. Did I say a major renewal project? In fact we are renewing only 40 homes a year. At that rate 395 it would take more than 10 years to do all those houses, and that is not acceptable, considering that many of them are unfit. Alongside them, we can see the great successes in Tinsley road and Staniforth road, where enveloping schemes saved the houses and the communities. We went in and did all the work on all the roofs and walls, the damp proofing and the rewiring. The fabric of the properties was tackled all together. Those were good schemes but, unfortunately, Government legislation stopped them.
The Minister will probably say, "The solutions are obvious. All Sheffield city council has to do is to let its vacant properties." So before he does, let me tell him that the council has an excellent record. Only 1.6 per cent. of its properties are vacant—a figure below the Government target of 2 per cent. And before the Minister tells us that we should collect our rents better, I shall tell him that in each of the past five years Sheffield city council has collected 99 per cent. of the rent due for the year. Last year it collected more than 100 per cent., and over a five-year period it has reduced arrears as a percentage of the rent due by one third. The council can be proud of that record, which has been achieved despite the fact that in cash terms rents have increased fivefold since 1979.
§ Mr. Betts
My hon. Friend is talking about the response that he got from the Prime Minister to one of his questions last week.
The solution is obvious. It is about more investment, and the release of capital receipts. Sheffield now has £40 million that could be spent on housing investment, and if it were available we could start the process of renewing housing there, and creating more new homes.
I accept that that would be only a start, but the Government could signal a different attitude towards local authority and other public sector housing. They could accept that there should be diversity in housing, that public sector housing is not second class, and that different people need different types of housing because they have different housing needs at different times in their lives. Some of those needs will properly be met by local authorities, and some by housing associations. There should be no stigma attached to being a council tenant. People should not be regarded as failures if they have not achieved owner-occupier status.
We can investigate innovations such as local housing companies, which are allowed under the Housing Bill. However, I argue strongly that most tenants—certainly those in Sheffield—want to remain with the local authority. Of course there are occasionally complaints about the authority, but by and large there is a good relationship, and tenants want to remain. We should allow investment from the private sector to be made in local housing companies that remain within the public sector.
We must also tackle the problem of renewal in private housing in the old inner-city areas such as Darnall. We need more resources for that, and perhaps we should consider innovations such as combinations of loans and grants to maximise the use of resources, both public and private, to save the infrastructure of those houses before we have to embark on a new slum clearance programme.
We must also deal with the rents in the housing association sector. The idea of rents of £60 a week, which take one third of the income of people who move into the properties, is nonsense.
396 The housing needs of Sheffield are clear for anyone to see. It is now time to give housing there and throughout the country the priority that it deserves. It is time to give to Sheffield council and other local authorities, and to housing associations, the resources that they need to ensure that housing needs are met. We cannot tackle all the problems at once—no Government can—but at least we can start moving in the right direction.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison)
I welcome the opportunity to set out the Government's policies to meet housing needs. It may assist the hon. Member for Sheffield, Attercliffe (Mr. Betts) if, before turning to the particular issues that he has raised in connection with Sheffield, which I shall discuss in due course, I set those policies in a wider context and deal with some of the wider issues that arise from what he said.
The issue of housing need in general has achieved some prominence recently, with my Department's White Paper and with the work of the Select Committee on the Environment. It may be helpful if I take those, and the Government's policies, as a starting point.
The Select Committee commended the Government for publishing estimates of future housing need. We want to encourage debate—informed debate. The Committee also acknowledged many of the uncertainties in estimating need, and the fact that there is no clear "right answer". It also commended our efforts to improve methodology.
The Committee supported the Government's estimate that 60,000 to 100,000 additional social lettings were required each year. In view of the hon. Gentleman's comments, and his concentration on local authority new build, I shall deal in some detail later with exactly how we are meeting those needs in diverse ways. We share the Committee's view that that estimate is a good starting point for debate. We are considering the Committee's recommendations carefully and will respond to them shortly, so I do not want to anticipate that response today.
At the lower end of the range, public investment is providing an average of about 60,000 additional lettings a year. Investment at that level means that about 300,000 households every year move into a home in the social sector. Provision at that level leaves proper scope for some of the demand to be met by the private sector through additional growth in home ownership and renting.
Home ownership has continued to grow in recent years, and the number of private rented homes has increased faster than expected—to some extent as a result of the Government's successes in reforming the legislative framework for the private rented sector. That does not bear out the view of the pessimists who argue for very high levels of provision of social housing. The number of people in severe housing need is small in absolute terms, and the Government are taking steps to drive the figure lower. We regularly monitor a number of indicators of housing stress, and those show that the numbers of people in overcrowded conditions, in bed-and-breakfast accommodation and sleeping rough have all fallen substantially in recent years.
It is right to put it on record that home ownership is still what the vast majority of people want. Low interest rates, stable house prices and sustained growth in the economy and jobs help to make it more affordable for many. 397 Our estimate of 1.5 million more owner-occupiers over the next 10 years reflects current trends. They include the replacement of older households by younger and middle-aged households that are more likely to own, and existing rates of right-to-buy sales, to which we attach considerable importance. With continuing growth in home ownership, there has been a 200,000 increase in the past five years in the number of private rented homes and an improvement in quality.
It is important to emphasise, in response to the hon. Gentleman's concentration on local authority new build as the form of provision for social housing, that we must consider the total number of new social lettings that public expenditure provides in several different ways in addition to those that he specified. It would be inaccurate to consider only the figure for local authority new build. That ignores the homes built by housing associations, with local authority housing association grant in some cases; building for low-cost home ownership through housing associations; housing associations that buy rundown private property; and the dwellings freed by incentives to buy in the private sector. All those means help to create provision for meeting social housing need.
Over the five years from 1991 to 1996, public investment has provided about 250,000 homes for social renting or shared ownership by building new homes and rehabilitating old ones. That is meeting the need of the social tenants who move into those properties, irrespective of whether the accommodation is provided by the local authority, a housing association or whatever. The important point is that social housing need is being met. An additional 7,000 social lettings have been created by incentives for tenants to buy their own homes in the private sector, which is good in itself because it gives tenants opportunities as well as releasing homes for others who need social housing.
Public expenditure on new social housing remains high. The Housing Corporation's approved development programme in 1996–97 exceeds £1 billion and it is expected to lever in £827 million in private finance. I take issue with the distinctions that the hon. Gentleman made between public and private finance. He should bear it in mind that that private finance is, in its own way, going to help meet social housing need. It is not adding to the burden on public expenditure and the public sector borrowing requirement. That is an important point. Housing associations have attracted around £6 billion in private finance since 1988–89 to supplement approved development programme and local authority funding.
It is also essential that we make the best use of existing housing stock, both for the housing opportunity that empty dwellings represent and to reduce the need for new development. More than 4 per cent. of housing in England is vacant—about 800,000 homes. In the White Paper, we set a target to reduce that figure to 3 per cent. over the next decade. We intend to do that by encouraging people to rent property rather than leave it empty, by creating the conditions for a healthy housing market so empty homes are sold, by investing through housing associations that buy up rundown properties, repair them and bring them back into use, and by improving the performance of all parts of the public sector, including the local authorities' 398 strategic role working with the Empty Homes Agency. We are also addressing the issue of homelessness in the Housing Bill that is currently before the House.
The debate about the provision of affordable housing usually involves comments what about could be achieved by freeing up authorities' accumulated capital receipts. That has been touched on tangentially today. There is no escaping the fact that any extra money spent by local authorities from their capital receipts would add to public expenditure and to the public sector borrowing requirement. Local authority debt stood at more than £36 billion in March 1995 and it cost £3.4 billion to service in 1994–95. Our policy of requiring certain proportions of capital receipts to be set aside for debt redemption reduces the burden of servicing local authority debt. That is a prudent approach.
It is important to recognise the separation between the need to spend and the ability to generate receipts. The competitive housing investment programme and local authority capital control systems allow resources to be allocated to the authorities with the greatest needs and those that make the most effective use of them.
As the hon. Gentleman said, in its housing strategy, Sheffield city council estimates a need for 5,600 new homes by the year 2001 and that 40 to 50 per cent. would need to be rented by households that cannot afford to buy at current prices. During the five and a half years to the end of June 1995, an annual average of just over 900 dwellings were started. Sheffield will, of course, benefit from the range of policies that I have described. Homelessness in Sheffield has been falling, from an earlier peak than the national one. In 1995, the homelessness rate in Sheffield was 0.9 per thousand households, compared with the national rate of 1.4.
The hon. Gentleman adverted to the housing investment programme. As he knows, HIP resources are distributed first to regions, then to local authorities using the generalised needs index and indicators for specified capital grant. Housing Corporation resources are allocated in a similar way through another index. A fundamental review of those indicators, especially the new provision indicator, was completed last year and used in the allocations for 1996–97. The changes to both indicators have significantly benefited Sheffield. In addition, stress area enhancement was introduced into the generalised needs index and Sheffield has been a significant beneficiary of that.
On the Housing Corporation and meeting need through housing association, the Housing Corporation's approved development programme resources allocated to Sheffield increased from £5.8 million for 1995–96 to £8.2 million for 1996–97. The total number of lettings provided through all programmes is up from 323 to 500. The competitive approach to housing investment programme allocations continued in allocations for 1996–97, and that produced a £17.9 million HIP allocation to Sheffield.
Sheffield has also benefited from the single regeneration challenge fund, providing a new opportunity for partnerships locally to determine their priorities and develop a holistic approach to regeneration. In the first two years of the single regeneration budget, Sheffield has chosen to concentrate regeneration on areas of housing disadvantage. It has secured two of the largest SRB awards nationally, with approvals of £38 million and £36 million in rounds 1 and 2 respectively. The content of any round 3 bids will be for local decision.
399 However, Sheffield's performance on some of the housing management indicators remains disappointing in some respects. The hon. Gentleman referred to some of those. There is an issue over the number of empty local authority dwellings available for letting. I understand that there are 708 empty local authority dwellings available for letting. That represents a management voids rate of 1.6 per cent. compared with an average of 1.2 per cent. for similar authorities in the region. It takes an average of 48 days to re-let management voids in Sheffield. I understand that current tenants' rent arrears amount to 4.4 per cent. of the rent roll. That compares with a regional average for similar authorities of 2.8 per cent.
§ Mr. Betts
First, will the Minister confirm that, in its allocation policy, Sheffield gives people on waiting lists a choice so that they do not have to accept the first home that is offered? That can mean longer periods in which houses are vacant, but it is a good policy. Secondly, on rents, does he accept that overpayments of benefit are put into rent arrears figures in Sheffield but that they are not in many authorities? That distorts the comparison.
§ Mr. Clappison
The hon. Gentleman speaks with his special knowledge of Sheffield. The comparisons that I am making are relevant—
§ Mr. Clappison
They are not wrong; they are accurate. They are between the performance of Sheffield and that of other local authorities in the region.
While I am pleased when Sheffield benefits from Government programmes such as the SRB and estate action, it is important to consider its performance and the ways in which it can be improved. I am sure that the hon. Gentleman would want to cast a critical eye over that performance when it comes to important issues such as voids, which are keeping additional people in housing need through inefficiency, and also rent arrears, which must be an important issue for any local authority. Those are important matters to which Sheffield must give some attention. Clearly, there is room for improvement.
The White Paper emphasised the Government's continuing commitment to improving the condition and diversifying the ownership of social housing through the voluntary transfer of council housing to local landlords. I welcome Sheffield's work on the local authority stock management options study, which has been developing our knowledge of the practicalities of such transfers. We have also initiated the estates renewal challenge fund with £310 million of new money to deal with those issues.
That approach is somewhat at odds with the hon. Gentleman's approach, which concentrated heavily on local authority new build provision as being the only way to meet need. The hon. Gentleman is aware that there are many other ways of doing that.