HL Deb 15 March 1977 vol 380 cc1453-9

2.57 p.m.


My Lords, I beg to move that the Housing Finance (Northern Ireland) Order 1977 be approved. This draft order is designed to place on a more sensible basis the way in which the work of the Northern Ireland Housing Executive is financed. In the current financial year, the Department of the Environment for Northern Ireland will make payments to the executive under no fewer than 21 different subsidies and grants. These existing arrangements are exceedingly complex and are certainly not conducive to sound financial management.

The draft order proposes new arrangements which would acknowledge the basic fact that the executive has only two main sources of income—rents and subventions from Government. Under Article 9, the executive will be required to submit to the Department estimates of its capital and revenue expenditure, and under Article 10 the Department will be able to meet the estimated deficit between the executive's approved revenue expenditure and its income from rents. There is already machinery for the Department and the executive to agree capital programmes, forecast revenue expenditure and monitor progress and this machinery will ease the introduction of the new financial arrangements.

Articles 5, 6 and 7 deal with rents and rent rebates and largely restate existing law. The decisions about rent levels in Northern Ireland are, in practice, taken by the Government. At present, average public sector rents are lower there than in Great Britain. In determining future rent levels, the Government will be bearing in mind average rents throughout the United Kingdom, housing costs in Northern Ireland, national policy on prices, the differences in earnings and other household costs between Northern Ireland and Great Britain, and the existence of a rent rebate scheme to help tenants on low incomes. The Government are of course very much aware of the grave housing problems in Northern Ireland. We recognise that every pound spent on subsidising rents for existing tenants is one pound less to be spent on building new houses and upgrading existing homes. In 1976–77 only 38 per cent, of the executive s revenue expenditure of £77 million will be met by rents; the rest must be met by the Government. The Government are, there-fore, convinced that a policy based on reasonable rent increases each year is sensible.

The rest of the draft order is mainly concerned with restating the existing law on housing finance. For example, Articles 3 and 4 deal with borrowing by the executive and Article 11 set; out the arrangements for auditing the accounts of the executive. However, I should like to draw your Lordship's attention to Article 8, which will enable the executive to introduce a new tenancy agreement to replace the many different arrangements which have been inherited from the former local housing authorities. It is intended that the new tenancy agreement will spell out as clearly as possible the rights and responsibilities of both the tenant and the executive. This draft order is designed to simplify the way in which the Government finance public authority housing in Northern Ireland. It is therefore of vital importance to the Governments drive to improve housing conditions in Northern Ireland. I beg to move.

Moved, That the draft Housing Finance (Northern Ireland) Order 1977, laid before the House on 16th February, be approved.—(Lord Melchett.)

3.2 p.m.


My Lords, I am grateful to the noble Lord, Lord Melchett, for explaining this order which reorganises the financial arrangements for the Northern Ireland housing executive, and in its main intention I support the passage of the order. However, there are three points related to the order which I should like to raise. The Explanatory Note to the order shows that the Northern Ireland Department of the Environment will provide a single comprehensive grant based on estimates of income and expenditure to be submitted to that Department by the Northern Ireland housing executive, and I think it is interesting that the Annual Report of the Northern Ireland housing executive for the last financial year makes the point that, so far as capital expenditure is concerned, avail-ability of finance has not been a factor which limits the executive's housing programme. But if one looks at the Northern Ireland housing executives' Report for the last year, there is a very different story to tell with regard to last year's operations for recurrent expenditure. The Northern Ireland Department of the Environment paid to the Executive a special subsidy of nearly £15 million and, as the noble Lord has explained, the deficit is being incurred because the only income for the Executive derives from rents and from Government grants.

The reason for the gap is further clarified when the executive, in their report, revealed that the gap between tenants' rents, which are at about £5.06 per week and the total outgoings in respect of a three-bedroomed house, for which of course the executive has to service the building loan and maintain and manage the property, is no less than £28.40 a week, which really is an astonishing sum of money.

I listened with interest while the noble Lord outlined briefly, but I thought very helpfully, the criteria to which the Government will pay regard in deciding policy on the increase for rents in Northern Ireland for which Article 7 in the order makes provision. Rent levels in Northern Ireland are of course a good deal lower than they are in Great Britain, and I must confess that I think that is right. One has only to visit Northern Ireland and obtain some knowledge of the statistics of income in Northern Ireland to take that view, but when one bears in mind that the average of rents in England and Wales two years ago was over 65 per cent, higher than in Northern Ireland, I can only support the general intention of Article 7 of the order. I was going to ask a question on that but the noble Lord has resolved it.

I now have two questions: first, has the noble Lord any information about the non-payment of rent and rates, which regrettably has been a feature of housing in Northern Ireland? I attach that question to this order because I wonder what part of the deficit that comprises for the Northern Ireland housing executive in a particular year. I am aware that as from the 5th April of last year, the Department of Health and Social Services in Northern Ireland took account of those owing rent and rates in making deductions in benefits, or seeing that deductions were made from the wages and salaries of those in arrears. Have these measures had effect, and could the noble Lord, Lord Melchett, give any figures of sums owing in respect of rent and rates?

I should like to ask one other question about housing completions. During last year—and again I refer to the executive's Annual Report up to 31st March 1976—the Northern Ireland housing executive built 5,164 houses, which I know is way below the target which the executive would like to achieve. There are of course reasons which are unique to Northern Ireland for the difficulty in completing more houses, but it does not alter the fact that the waiting list for new houses in Northern Ireland is very long and the number of people living in unfit houses is very high. I hope that the year which is now ending may show an upturn in the number of completions, and I shall be grateful if the noble Lord has any figures to give me about that today, though I should like to acknowledge that this should not be the only yardstick by which the valuable and sometimes dangerous work of those employed by the Northern Ireland housing executive should be judged. With those few words I should like to give my support to this order.


My Lords, I am extremely grateful to the noble Lord, Lord Belstead, for his support for the order and indeed for his acknowledgment of the very real difficulties which face the housing ' executive in Northern Ireland, both so far as their building programme and their completions are concerned and also the difficulties that face the Government as a whole in deciding the level of rents in Northern Ireland. The noble Lord quite rightly drew attention to something of which we are acutely aware; namely, the differential between the level of rents in Northern Ireland and in the rest of the United Kingdom, and at the same time the appalling problems which are faced by many people in Northern Ireland, who are receiving exactly the same level of social security and other benefits but are faced with much higher fuel costs and indeed higher costs with respect to food, clothing and so on. I entirely agree with the noble Lord that while we must take those difficulties into account, it is also necessary to raise the level of rents so that they are at least more in line with those in the rest of the United Kingdom. I am grateful to the noble Lord for his welcome for the steps which the Government are taking this year and indeed last year, to work our way towards that objective, but bearing in mind all the time the very real difficulties which are faced by people who are living on supplementary benefit and other benefits in Northern Ireland.

The noble Lord asked me about the non-payment of rent and rates and the arrears owing to the housing executive. That is something in which I have a particular interest, because the Department for which I have responsibility—the Department of Health and Social Services—is responsible for administering one of the systems which is used for collecting rent and rates arrears in Northern Ireland, that of direct deductions from social security benefits, a system of collecting arrears which of course is not available in this country.

The noble Lord asked me about the level of arrears, and I can tell him that the executive is at the current time owed some £6 million for rent and rates. There are about 37,000 tenants in arrears of £20 or more out of a total of 175,000 tenants, but the rent increase which has recently been brought into effect in Northern Ireland is not due to the size of rent arrears. The housing executive's accounts are income and expenditure accounts in which the executive takes credit for rent it should receive each year: uncollected or unpaid rent is kept separately as a debt to be collected, and the basis on which rent increases are worked out assumes that the executive will be collecting all the arrears. Indeed, recently the Government have reaffirmed in Northern Ireland our determination to see that all the arrears owing to the housing executive and other public bodies should be collected. At the same time, as the noble Lord may know, we have made some changes in the system of allocating from social security benefits towards arrears to ensure that those families which are suffering real hardship as a result should have some means of coming to the Department of Health and Social Services and making a case for having lower reductions made from their social security benefits. Nevertheless, reductions, if they are necessary, will continue and the Government have made clear that the arrears will be collected and therefore the housing executive's finances are not directly affected by the size of the debt.


My Lords, if the noble Lord will forgive me for one moment, I have tried to reconcile the figures. Did I understand him correctly—it is quite likely that it is my fault—that there are 30,000 tenants out of 175,000 who are in arrears and that the total amount by which those 30,000 are in arrears is £6 million? It sounds as though some of them have never paid at all.


My Lords, the noble Lord is correct; 37,000 tenants are in arrears of £20 or more. It is quite true to say that some of the arrears are very large indeed. Some of the people who are in debt, just as people who are in debt to local authorities for their rent in this country, owe extremely large sums of money and face extraordinarily difficult problems in repaying very large debts. People on social security benefit, possibly with a large family to feed and clothe and who are facing higher heating and food costs than they are in this country, but who are on the same level of social security benefit as they would be in this country, face very real difficulties in repaying large debts. This is something recognised by the Government and by the housing executive, but, as I say, it does not alter our determination to ensure that the debts are collected.

The noble Lord also asked me a question about the rate of completions of the housing executive building programme. I do not have the figures in front of me. If I may, I will write to the noble Lord to give them to him. I think the significant change of policy which has taken place on the housing executive front in the last few months is a major switch to giving emphasis to housing in Belfast, and particularly the inner city areas of Belfast, where it is quite clear that the problem is of such proportions that a major drive is needed even to stand still, let alone to start making some inroads into the problem of the existing housing stock which is dilapidated or falling into disrepair. That is a major switch of policy on the part of the housing executive. A large amount of money will be available to back up their drive for better housing in Belfast, something to which I hope other Government Departments in Northern Ireland will shortly be able to give some considerable support. It will obviously be of major importance in the housing executive's policy over the next few years.

On Question, Motion agreed to.