§ 4.24 p.m.
§ Lord Bellwin
My Lords, with the leave of the House, I wish to repeat a Statement made in another place by my honourable friend the Minister for Housing and Construction. The Statement reads as follows:
"On 7th September 1982 my honourable friend the Member for Tonbridge and Mailing announced a scheme of financial assistance in the form of repairs grants or repurchase to owners of Airey houses which had been sold by public bodies and which had subsequently been discovered to be subject to serious defects or potential defects. On 8th February he told the House that he had asked the Building Research Establishment to study possible deterioration in other types of prefabricated reinforced concrete houses built before I960. The establishment is publishing today an Information Paper summarising its findings of separate reports on six of the most common types—the Boot, Cornish Unit, Orlit, Unity, Wates, and Woolaway designs. A copy of the Information Paper has been placed in the Library.
"The Building Research Establishment has found that the reinforced concrete components in all six types are gradually deteriorating as a result of carbonation of the concrete and, in some cases, the presence of high levels of chloride, leading to corrosion of the steel reinforcement and consequent cracking of the concrete. The great majority of the houses studied were found to be in structurally sound condition. There were significant differences in the rate of deterioration both between and within types. Some cracking was found in all the types and the nature of the process is such that deterioration will continue, although in some cases very slowly. All houses of these types will eventually be affected by cracking. Cracking in a proportion of houses will not occur for some years, and a few houses may not display any evidence of deterioration for the next 30 years or more.
"No conditions were found which were structurally unsafe. Risk to stability would be preceded by visible serious cracking in Boot, Cornish Unit, Wates and Woolaway houses. In Orlit houses, concealed main and secondary beams should be inspected now, if this has not been done already following the department's letter to local authorities of 2nd September 1982. Concealed columns and steel bracing in those Unity houses which have plasterboard or other dry lining should be inspected within the next year. Where serious cracking is present, professional advice should be sought.
"The processes of carbonation and attack by chlorides are likely to affect all prefabricated reinforced concrete houses built before 1960. There are about 170,000 of these houses in the United 976 Kingdom which were built by public bodies. Approximately 16,500 have been sold, mostly to sitting tenants.
"I stress that the Building Research Establishment's studies are only of prefabricated reinforced concrete houses. The conclusions carry no implications for houses of non-traditional design which use other load-bearing materials.
"Private owners will find themselves in a difficult position as a result of the effect of these findings on the value of their houses. The Government have decided to introduce early legislation to provide a scheme of assistance to private owners of houses sold by the public sector and since found to be defective or potentially defective. This will be on lines which are broadly similar to those of the scheme for owners of Airey houses which is already in existence.
"The essential feature of the proposals will be a right of assistance. This will arise where the Secretary of State determines that houses of a particular category built by a public body should fall within the scheme because he is satisfied that, as a result of their design or construction, they suffer from, or can be expected to suffer from, structural defects not discoverable by normal survey at the time they were sold, and which have resulted in a substantial loss of value in real terms as compared with the value at purchase. In respect of these houses local authorities will be under a statutory duty to assist either by way of a repairs grant or repurchase.
"A grant of 90 per cent. of eligible expenses on repairs is intended to be the main form of assistance. But there will be cases in which repair will be uneconomic, or will not give the house a further useful life of at least 30 years, or will still not make the house mortgageable in the private sector. There will be other cases in which there would be hardship for the owner if repair were the only form of assistance possible. In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes. Owners will receive 95 per cent. of the defect-free value of the house.
"We have in mind that the scheme should apply to all types of prefabricated reinforced concrete house built before 1960. However, no final decisions have been taken on the initial coverage of the scheme and the BRE is studying six further types to supplement its findings.
"In addition to the mandatory scheme, local authorities will be given a discretionary power to assist owners of defective houses which meet these criteria, but in respect of which the Secretary of State has made no order requiring the local authority to give assistance. This power will enable local authorities to assist where there are local problems.
"The local authority associations will now be consulted about these proposals. I will be asking them to comment before 16th December on a consultation document which is being sent to them today; a copy is being placed in the Library. A Bill to give effect to these proposals in Great Britain will be introduced as soon as possible thereafter. Separate legislation will be introduced for Northern Ireland.
977 "The need for expenditure by individual local authorities on this scheme, and on defective houses remaining in their own stock, will be taken into account in determining their housing investment program me allocations.
"The BRE has also studied the Smith house, which uses a different system of construction. A detailed report will be published next month. I shall be considering whether local authorities should be under a duty to give assistance to private owners of that type of house.
"The department is writing to local authorities to inform them of the BRE's findings and of the proposals for legislation. Copies of the letter to local authorities and a table giving figures of prefabricated reinforced concrete houses in each local authority area have been placed in the Library.
"The Scottish Development Department and the Welsh Office will be writing in similar terms to local authorities there. The Scottish Development Department will also be writing to the Scottish Special Housing Association and will be holding consultations with the Convention of Scottish Local Authorities
. "Mr. Speaker, I apologise to the House for the length of this statement and for the fact that the texts of the seven separate reports which have only just been finalised are not yet available for publication. But I wanted to make a Statement just as soon as possible. The reports will be published very early next month, and will be sent to local authorities with a request that they be passed on to private owners of these houses in their areas".
My Lords, that is the end of the Statement.
§ 4.32 p.m.
§ Baroness Birk
My Lords, may I thank the Minister for repeating the Statement. We naturally welcome the extension of assistance to the categories that he mentioned. However, I would point out that some of the worst houses were built after 1960 and are not subject to these proposals; for example, Bison and the BISF houses. Can the Minister say whether there are any plans for these? By restricting the legislation, as paragraph 6 of the Statement states, to provide assistance for owners of houses which have been sold to those owners by the public sector, it means that council house tenants are completely excluded. Most of these houses are in local authority ownership. The quantification of the problem on a national basis is 500,000 houses with repair bills amounting to around £5 billion. This is the result of an AMA report which I am sure is well known to the Minister. Does not the Minister agree that this will have devastating effects on council house rents, as local authority houses are not going to be helped? Is it not unfair to ask council house tenants to bear this burden?
I notice that paragraph 12 of the Statement says that the need for expenditure on defective houses will be taken into account in determining housing investment programme allocations. But during the period of this Government housing investment programme allocations have been cut by 60 per cent. In view of public expenditure cutbacks in the past and those that we unfortunately fear in the future, in which housing 978 has always been an outstanding sufferer, will this be fully covered in determining HIP allocations in order to permit the carrying out of very necessary repairs and the rescue of very great deterioration?
I see that paragraph 7 states that in respect of certain of these houses,local authorities will be under a statutory duty to assist either by way of a repairs grant or repurchase".Can the Minister enlarge on that? I take it to mean that the local authorities, come what may, have to find money somehow. With all the restrictions on local authorities, how will they do that? I am sorry about all these questions but the Minister said that it was a long Statement.
Paragraph 8 states:There will be other cases in which there would be hardship for the owner if repair were the only form of assistance possible. In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes".I do not understand which are those cases. It is not clear. How are local authorities to find the funds unless these are completely covered in their Housing Investment Programme allocations? If not sufficiently financed, it must mean that council house tenants living in these properties will only be able to get a grant to resolve these defects if they have purchased them. They will have to purchase the house in order to get the defects corrected. This is a financial and social squeeze that will be extremely painful.
Although the Statement says that the defects, at the moment, are not structural, if the defects are allowed to remain and deterioration goes on, then they could become structurally unsafe and continual neglect could lead to danger—a danger to health and the risk of some accident that would affect the occupants of the houses.
§ Lord Beaumont of Whitley
My Lords, I, too, should like to thank the Minister for repeating the Statement. I congratulate the Government, on the whole, for the speed and the thoroughness with which they have tackled this problem. The only question that I wish to ask follows along the same lines as that put by the noble Baroness, Lady Birk. On the question of refunding expenditure, the position of local authorities financially, in this field as in others, as noble Lords will not need reminding, is not a happy one at this moment, and the prospects for the next year are not happy. It is good to know that large proportions of the expenditure will be met centrally and also that, according to the extremely vital paragraph 12, the need for expenditure will be taken into account in determining housing investment programme allocations. It is clear that when the Minister consults the local authority associations, one of their requests will he for 100 per cent. help in this matter. It is possibly what they should have. Have the Government considered this? If so, why have they rejected it?
§ Lord Bellwin
My Lords, I thank the noble Baroness, Lady Birk, and the noble Lord, Lord Beaumont, for what I think were their helpful and constructive comments. I should like to try and pick up the points that they made. The noble Baroness was concerned about houses built after 1960. Who knows what the future will bring as to that? But the report in 979 question refers to those built prior to that time. I would not want today to start casting the mind ahead. The problem is big enough as it is. It will have to be resolved over many years, I suspect, in the generality of all the houses to which I have referred.
I was aware of the AMA's £5 billion figure, Of course, I cannot comment upon it. I do not know how far it is right or wrong. I suspect, like many things, that there is an element of truth in what it says. It is a possibility but I would not want to be anything like so pessimistic myself. I should perhaps try to pick up a point that the noble Baroness made about Bison. As she knows from what was contained in the Statement, this scheme only covers dwellings that suffer from or can be expected to suffer from structural defects or potential defects resulting from their design or construction and which were not discoverable by normal survey at the time of purchase. I have no reason to believe that this is true of any dwellings nationally other than those built before that time although, as I have already said, this is something we shall have to look to for the future
The noble Baroness referred to the cut in the HIP allocations over a period of time. That is a fair comment except that there is just around now about the same percentage of cut that took place over the period of time of the previous Administration. That is so, if the noble Baroness checks. In any case, that is not really the problem with which we are faced today. The point is the one to which the noble Lord, Lord Beaumont, referred. That is the mention in the Statement of two things. One is that we obviously have to consult the associations about this. Secondly, it is intended to take this into account when making the HIP allocations. This will be a matter for discussion with the associations.
The noble Baroness asked how the local authorities will find the money for repurchase in view of all the difficulties. In that respect I have to bring her back to the sum of £6 billion in capital receipts currently in the hands of local authorities from the sale of council houses. So while there may well be problems—indeed, there are problems, as is apparent from the other factors that have been mentioned—for the authorities, I should have thought that the least of them would be the cash to repurchase. However, we shall see how that comes out in the consultations.
I am sorry if I did not quite follow the point made by the noble Baroness about the need for tenants to get grants to carry out defect repairs. Where tenants are in situ it is a basic problem for the authority itself. That in turn comes back to their HIPs and other resources, which will be part of the matters which they will surely want to raise in the consultations.
I hope that I have covered the initial points that have been raised. I recognise that this is a very unhappy situation for everyone to have to deal with. But I am grateful to the noble Lord, Lord Beaumont, for his comment about the Government feeling that we ought immediately, at the earliest moment, to face up to exactly what is happening. There are many people who are very anxious about this situation. It is proper that we should not delay at all, at least in starting something going with a view to taking action as quickly as possible.
§ Baroness Birk
My Lords, the Minister did not answer the question which I asked as regards clarification about the Statement. At the bottom of paragraph 8 it says:In these cases we propose to lay a duty on local authorities to acquire the dwellings if the owner wishes".It is not at all clear in which cases they are going to do so, or in which cases they àre under a statutory duty to assist by way of repairs grant or repurchase. Indeed, the money that they have obtained from selling houses will not be all that help on the capital account when they are faced with revenue expenditure to deal with the houses themselves. I still think that it is very sad for the local authorities. I hope that when the consultations take place the Government will take note of the situation. The local housing associations have already raised this matter at the Housing Consultative Council meeting, and they have got absolutely nowhere.
§ Lord Bellwin
My Lords, obviously I cannot comment on what took place at the last council meeting. The duty to re-acquire will apply where the repair is unlikely to give a mortgageable product. That is essentially what the Statement is saying. It may well be that this will have to be brought out in discussions with the associations when we sit down and talk about it with them.
§ Lord Stoddart of Swindon
My Lords, is the noble Lord the Minister aware that, while I and certainly many other people will be grateful for the assistance which is to be given to private owners, nevertheless we are considerably worried about the enormous burden that repairs will place on local authorities and, indeed, the tenants? I have it in mind—and the noble Lord has much experience of this—that many of these houses were built and purchased by local authorities at the behest of central Government. Indeed, central Government actively campaigned for and actively promoted these houses. I believe, therefore, that they have a duty to the local authorities to finance the whole of these repairs. If they do not do so, I fear that the local authorities themselves will be under great burden and great pressure; and particularly, of course, their tenants.
§ Lord Bellwin
My Lords, I am grateful to the noble Lord for his observations, with which in many ways I agree. I personally was on the receiving end of similar situations, but I must hasten to add that it was post-1960, though only just. When we begin to look at where the responsibility lies and to question who should put up the resources, we venture into very sticky territory. Certainly central Government have a part to play, for the reasons that I know, and local authorities also have a role in this whole matter. It would be wrong to say other than that were so. But it probably does not help us today to press on with this matter, other than to take up the point which the noble Lord was making about how much central Government should pay. That will have to come out in the discussions that will take place. I cannot help the noble Lord by expanding on the matter further at present, as I am sure he will appreciate. The point he makes is fundamentally valid. However, there is another aspect to it which will have to be weighed in the balance at the end of the day.