HL Deb 29 January 1986 vol 470 cc672-84

2.59 p.m.

Lord Seebohm rose to call attention to the Report of the Inquiry into British Housing chaired by the Duke of Edinburgh; and to move for Papers.

The noble Lord said: My Lords, I beg leave to move the Motion in my name. The report that we are about to debate is, to my mind, the most important contribution to housing policy, certainly in my lifetime, and possibly since the Royal Commission on the Housing of the Working Classes in 1885, one hundred years ago. Our very special thanks are therefore due to His Royal Highness the Duke of Edinburgh who chaired the inquiry and to the distinguished members of his team. I must also make special mention of the contribution made by Mr. Richard Best, director of the National Federation of Housing Associations, who acted as secretary to the inquiry.

In the introduction to the report the following words appear: We were aware, of course, of the political overtones of our subject matter—all electors have some interest in housing and votes can be won or lost by granting or withdrawing housing privileges. As economic circumstances change, housing may be seen to present an opportunity sometimes for stimulating the economy, sometimes for tackling inflation. We are also aware that 'a week is a long time in politics' and that governments last only a limited time,"— and I am sure this will also be appreciated— while individual Ministers often stay in post for even shorter periods. For these reasons we have consistently tried"— this is the point I wish to stress— to stand outside the arena of party politics. I hope this afternoon that the many speakers who have put down their names to participate in the debate will follow the same principle and not waste a rare and important occasion with political crossfire or recriminations, or attaching blame to any one party for the tragic deficiencies in our stock of housing. We are all to blame.

Before discussing the proposals in the report, I should like to establish what I believe to be the two fundamental principles of housing policy which I have long held and which must be the basis of any long-term housing policy. The first is that for a substantial proportion of the population—perhaps as much as 30 per cent.—housing always has been, certainly is now and probably always will be, a social service. Ever since the Royal Commission in 1885 attempts have been made to build houses for the working classes that would yield a more or less commercial return on cost. They have never succeeded. I would quote only two examples out of many. At the beginning of this century Joseph Rowntree decided to use some of his wealth in doing just this, and he engaged the help of two brilliant architects, Raymond Unwin (later Sir Raymond Unwin and adviser to the Ministry of Housing) and Barry Parker. They made several attempts to achieve this by eliminating all frills and extravagances. Joseph Rowntree said he did not want this to be a rich man's hobby, and he required the return on cost to be the same as the yield on consols at that time, in all conscience, very cheap at 3 per cent. They never achieved this, even though they increased the density of houses to 14 to the acre and provided no indoor sanitation, baths or hot water systems. After the First World War no further attempts were made.

The second example is described in Professor Adela Nevitt's book, Housing, Taxation and Subsidies, which she produced in 1966. In 1902 the town clerk of Shoreditch, giving evidence to the Select Committee on Repayment of Loans by Local Authorities, said that out of 533 families displaced by a slum clearance scheme only one family could afford the new rents which had been set. He went on to say, I believe that this is the same proportion as the county council experienced in their boundary scheme. I know they rehoused 11 families only, out of something like 5,000 whom they displaced. We can all guess where the rest of the 5,000 ended up. I could quote other horror stories but have no time. But what is still true today is that rented housing cannot be provided for poor people to produce a commercial return, and some sort of subsidy is always going to be needed.

The second basic principle, which is the natural corollary of the former, is that subsidies must be on people and not on buildings. In the dozens of housing Acts since 1885 the attempt to cheapen rents has been by lowering the cost of houses by direct capital grants or by annual subsidies over the assumed life of the building. We all know that this form of subsidy has failed to provide houses of an acceptable standard for the low paid, the aged or the handicapped, and at the same time it has created subsidised rents for the many who could well afford a more commercial rate. In other words, those who needed help most missed out and were compelled to live in old, substandard dwellings and often in hopelessly over-crowded accommodation.

Those are my two basic principles, and I therefore turn to the Duke of Edinburgh's report to see whether they are relevant. The committee naturally start their report by analysing the problem. The horrific state of affairs they describe is already widely known and I will not weary the House by repeating it all today. I must, however, remind your Lordships of one or two important points that justify the adjective I have just used. Almost 25 per cent. of all English dwellings need major repairs costing over £2,500 per house, according to the 1981 survey on the condition of housing, and the situation has deteriorated further since then. Fewer than 200,000 houses are being built each year and public spending on housing has declined by 54 per cent. since 1979 and is now being further reduced. This is the only major item in the Budget that has not actually increased in real terms.

Secondly, the AMA in their evidence to the committee estimate that owing to this neglect, £25 billion is now required to meet the repair bill, £10 billion to remedy construction defects and £15 billion to meet actual shortage of houses: a total of £50 billion. This is the kind of figure we are handing on to future generations owing to cumulative neglect in the past.

Thirdly, no private sector institutional money—that is, pension funds, insurance companies or building societies, uniquely in Western Europe or the United States of America—finds its way into housing for rent. Government policies since the Rent Act of 1915 have steadily destroyed private sector investment in private rented property, which has declined from 90 per cent. before World War I to 9 per cent. today.

Fourthly, the condition of many public sector housing estates is so poor that even those in urgent need reject it. Deficiencies exist on a grand scale in respect of tens of thousands of council properties built in the 1960 and 1970 period; many are badly designed or badly built or have proved unmanageable. All the evidence that the inquiry received showed the great need for more rented accommodation for the growing number of homeless families, particularly where there are many children, but also for the single homeless. The Department of the Environment estimates are that 53,000 homeless households in 1978 had risen to 83,000 in 1984, and would probably reach 90,000 in 1985.

Having described the problem, the report then gives what it believes should be the objectives of any housing policy. It states: Every householder shall be able to occupy a dwelling of a size, type, standard and location suitable to its needs, free from nuisance, harassment or arbitrary eviction and should have a free choice of tenure (freehold, leasehold or other)"— short-term or whatever— without prejudging its mobility or its rights to financial aid, equality under the law or status.

This, of course, is an objective over time and the report therefore recommends several areas of priority. First, there must be sufficiency of adequate housing, and action to remedy this must start now if it is to be achieved this century. Secondly, means must be found to introduce a plentiful supply of private sector investment in rented property. Thirdly, there must be redirection of support now provided by central and local government so that those with lower incomes can afford the housing they need, rather than by subsidising buildings. Fourthly, the householders must have more say in the management and condition of their homes and environment through tenants' associations, housing co-operatives and similar bodies. Fifthly, there must be an avoidance of segregation in order to avoid ghettoes of poor and disadvantaged people.

My Lords, we now come to their proposals. We all know the benefits that accrue to the owner-occupier, of which the major items are freedom from capital gains tax and full deductibility of mortgage interest. He pays no tax on the imputed income from his investment in his house since Schedule A was abolished in 1963. It is estimated that the tax relief on mortgage interest alone cost the Exchequer £3.5 billion last year. This benefits the top taxpayer to the tune of £850 per annum and will exceed £4.5 billion, it is estimated, this year, while the lower income groups get no benefit. This tax benefit is equal to 4½ pence on income tax.

All tenants, however, I admit are now eligible for housing benefit. This is administered by local authorities; it is extremely complex and there are many delays in payment. It is means tested in contrast to mortgage interest relief for owner-occupiers, and costs £2.6 billion as opposed to the £3.5 billion given to owner-occupiers. The private rented sector has been subject to rent control since 1915 and even now under the fair rents control does not attract investment.

There is no time to describe the local authority system of finance which is complex, incomprehensible to most of us and, in many ways, illogical. It is further complicated by Treasury accounting conventions which appear to me to be absurd. The committee conclude after a detailed discussion of the present financial framework that change is essential, being inequitable in the treatment of different groups of householders, ineffective in meeting identified housing needs, preventing the growth of private rented housing, constraining individual choice and inhibiting rational planning.

The main recommendations are intended to make a gradual shift—and I stress the word "gradual"—to fiscal neutrality between owners and tenants, by means of removing over a 12-year period, which really means to the end of the century, mortgage interest relief, which I know will be most unpopular, and to replace all current personal housing allowances by a single needs related housing allowance, probably administered by the DHSS. The removal of mortgage interest relief is, to everybody's surprise, supported by the CBI. It is also supported very strongly by Faith in the Cities, which is the latest document on this subject which I have read.

The appropriate level of income attracting the maximum allowances would vary regionally, such allowance to taper off as income rises. But the poorest householders could receive full eligible housing costs. Although this would be expensive, the cost is unlikely to be more than the present range of housing subsidies as those on higher incomes would lose out. But the relief would be targeted on those most in need. I know that this will no doubt be bitterly opposed by the better off, but to me it is a sine qua non if we are to rationalise benefits.

The next recommendation is concerned with rent control which is quite revolutionary. The proposal is to value all rented dwellings on a vacant possession basis calculated on recent sales of similar properties, and to fix the rents on a commercial rate that would attract private investment. This is part and parcel of the proposals to bring private institutional money into the provision of rented accommodation. More resources must be made available if the problems of homelessness and sub-standard housing are to be removed.

The system of rent fixing that I have just described could be attractive at a comparatively low initial rate of interest if it is indexed by biennial valuations. The initial rate therefore becomes a real rate and would be comparable to the Government indexed issues, subject to an "add on" to cover the administrative costs and the small commercial risk. The present real rate on Government indexed bonds is just under 4 per cent., so that this could be quite a cheap way of financing housing. The rate could well be under 5 per cent.

Private sector money could also be made available to local authorities for specialised property for, say, single people, the disabled, the elderly and families with special needs. The local authority would take a head lease from the developer at the market rate and be indexed according to the RPI or some similar index. At the same time, the private investor must be able to get a commercial return on his investment in order to bring some of the 660,000 empty properties back into occupation.

It is worth looking at the housing provision in Germany, which had to face an appalling shortage after the mass destruction in the concluding phases of World War 2. The Anglo-German Foundation has recently produced a comparative study on housing conditions in our two countries which I find most interesting and constructive. Germany has continued a high level of housing investment and produced a ratio of dwellings to households far superior to Britain. Incidentally, this has produced a more efficient industry and workforce and hence a better quality of housing stock.

This investment has come from a very different direction than in Britain. There has been a political consensus in Germany on encouraging the market system to work and intervening only to overcome inertia or special situations. Subsidies go principally to individuals, so they can pay rents provided by a much larger private sector, including housing associations. Rents in Germany are about 50 per cent. higher than in Britain—that is, about 12 per cent. of income as compared with only 8 per cent. here—but the houses are of higher quality and are kept in good repair. A final point is the richer social mix in cities, with fewer ghettoes of working-class stereo-typed buildings.

Vital lessons are to be learned from the Duke of Edinburgh's inquiry and, as I said at the beginning, I pray that we can achieve an all-party consensus on the present catastrophic situation in the country and the need to adopt entirely new methods of overcoming the problem. A start must be made now and if the recommendations made in the report are not largely implemented, then I am sure that most of your Lordships will want to know the reason why. The costs may be high, but the savings on the present administration of misery may well result in net saving.

I remember being told by children's officers, when I was chairing the committee on the local authority personal social services, that probably half their time was spent on problems caused by crowded, unhealthy and inadequate housing. I recommend this report from the Duke of Edinburgh's Committee as, for many, compulsive reading and, for many more, compulsory reading. My Lords, I beg to move for Papers.

3.16 p.m.

The Minister of State, Department of the Environment (Lord Elton)

My Lords, the House will, I am sure, wish me to thank the noble Lord, Lord Seebohm, for providing, with this Motion, an opportunity to discuss a subject of very considerable importance. He speaks, of course, with the special authority of the principal author of his own Seebohm Report on the reorganisation of the social services.

The inquiry into British housing was instituted by the National Federation of Housing Associations to mark two occasions. The first was their own jubilee and the second was the centenary of the publication by the Royal Commission on the Housing of the Working Classes of their own report on very similar matters in 1885. On their jubilee, the federation certainly deserve our congratulations. Their members indeed deserve grateful thanks for the essential and beneficial work that they have for so long been performing.

Our gratitude is also due to the committee which the federation appointed to conduct the inquiry. Whatever our view of their conclusions, they carried out a penetrating review of a range of issues too rarely considered together and almost never considered impartially. Their chairman was His Royal Highness The Duke of Edinburgh, who we may think has a special concern with jubilees. They preserved impartiality, not only between the interests of the federation and the other agencies working in this field, but between the political parties as well.

It is, if I may respectfully say so, a mark of very skilful chairmanship that a body embracing such a wide spectrum of interests was able to deliver a unanimous report at all, let alone one that contains so much in the way of opinion and recommendation. I look forward to all of your Lordships' views and, in particular, to the contribution of the right reverend Prelate the Bishop of Southwark, who was a member of the committee and doubtless has an additional insight into its work.

The reasons for a politically neutral approach are set out in the first chapter of the report, to which the noble Lord, Lord Seebohm, has already referred. Impartiality between the parties is always desirable when one is seeking a truly valid exposition of any contentious subject. It becomes more so when not only are those parties political parties but when, as in this case, the timescale of one's subject extends over the prospective life of several successive future Parliaments. Then it is, of course, particularly attractive, because in those circumstances the only durable solutions possible are those that commend themselves to all political parties, whatever their colour. They cannot be arrived at from any position that is exclusive to a major party's philosophy.

The way in which the committee achieved impartiality is summed up in their fourth paragraph: …the only sources of evidence which we have consciously omitted are the political parties. It was our view that we should avoid the dilemma of being forced either to accept or reject strongly-felt but opposing opinions placed before us by politicians. They went on to say: This means that we are prepared to suggest remedies to housing ills which do not accord with present-day political opinions or even, necessarily, with current economic circumstances. That gets one into a certain difficulty. I have emphasised these early passages in the report because I think they form an essential context for this debate. Our discussion is after all taking place in a Chamber actually built to take account of the strongly-felt but opposite political views of its Members, as part of the machinery of government. In this House there is of course room for those of mature judgment who own no political allegiance. Here they sit on the Cross-Benches and sometimes, I may say, elsewhere! But in another place there is room for no such aloofness. The political balance there is not just part of the machinery of government. It actually determines which party shall deliver the Government and dictates, at only one remove, what the policy of that Government shall be.

Government is determined by politicians and they are put in power by the electorate. One ultimate constraint on any government's policy is the will of the electorate. Another is the economic circumstances of the day. Economics may not be so immediately effective, but it is sufficient that a government who ignore it may have to recall their Chancellor of the Exchequer, after he has left for Heathrow, so that he can come back and face reality. I would have said that regardless of the party to which the Chancellor belonged. Politics and economics between them set the limits on what it is possible for government to achieve.

Although the committee was prepared to recommend, remedies which do not accord with present day political opinions or even necessarily with current economic circumstances", it follows that it is likely that not all its recommendations will be acceptable to politicians or their parties.

Indeed, your Lordships will already know that a principal recommendation—the end of income tax relief on mortgage interest payments—does not commend itself either to my party or to many other politicians. Given that more than 60 per cent. of all dwellings are now owned by their occupants and that more than a third of all householders are paying interest on mortgages, that is not altogether surprising. The change, illustrated on page 23 of the report, from 10 per cent. owner-occupation in 1913 to 60.2 per cent. in 1983 is one of the most striking movements of the 20th century. It has been fired by the natural and instinctive wish of most British people to own their own homes and fuelled by mortgage finance, largely provided by the building societies movement, to whose valuable work this country owes a very great deal. Growth in home ownership still continues, I should add, and by 1985 had risen to 64 per cent. in England. Over the past six-and-a-half years we have seen the fastest growth in home ownership in our history. The number of owner-occupiers has increased by 2¼ million. In that period 900,000 flats and houses have been sold by local authorities including new towns, and housing associations. More than 800,000 of those were to sitting tenants.

The financial environment has been a vital factor in this. Most important has been the building societies' ability to keep up the necessary flow of mortgages. Of course this has meant charging market rates of interest, but most people agree that a mortgage with a fluctuating rate of interest is better than no mortgage at all. We have encouraged building societies to be more competitive in the rates and services they offer because more competition can only be for the benefit of their consumers. On the fiscal side, apart from maintaining mortgage tax relief we have both simplified stamp duty and reduced its impact.

We are also proposing, in the Housing and Planning Bill, a number of new measures designed to encourage the sale of more council properties, and particularly flats. Most sales so far have been of houses, and research has shown that tenants considering buying their flats have often been concerned about the service charges that they will have to pay. From some of the cases which have come to the department it seems that their fears are justified and that they are sometimes given misleadingly low estimates of repair costs.

The Bill will make the purchase of flats by sitting tenants much more attractive. Under it, we propose that there will be 10 per cent. extra discount on flats sold under the right to buy and to reduce from five years to three years the period of liability to repay discount if a council home or flat is resold. In addition, service charges in respect of repairs over the first five years of the lease on flats sold under the right to buy will be limited in accordance with estimates given before the sale. We also propose that leaseholders of flats bought under the right to buy should have the right to a loan from the landlord in respect of service charge for repairs.

I have heard it said that people are buying in haste to repent at leisure. That is not our experience. Research in 1983 showed that 94 per cent. of people who had bought under low cost home ownership initiatives felt they had made the right decision and that virtually all of them intended to go on being home owners. It is also suggested that buyers are being tempted out of their financial depth. It is true that the number of cases of mortgage arrears has increased, but less than 0.2 per cent. of mortgages are more than 12 months in arrears. I believe the causes of those lapses are far wider than the increasing level of home ownership.

We believe firmly in increasing home ownership, but can this growth continue? I believe not only that it can but that it will. The Building Societies' Association carried out a survey in 1983. Of all the people aged from 25 to 34 whom they interviewed, nearly 90 per cent. said that they wanted to be home owners within the next two years. Those young people's hopes are a motor force in both the economy and in the body politic. I accept and welcome the fact that the committee, like the Government, want those hopes to be fulfilled. To try to achieve that, in today's circumstances, without continuing mortgage interest relief does not seem to us to be practical politics.

I have put some emphasis on that point because of the rules of the game set out for us by the committee in its report. It presents its recommendations, as an overall framework in which the components hang together.… as a unity, not as a checklist from which particular points can be lifted". I am going to break those rules because it would, I think, be absolutely wrong to throw away this report and all the valuable and painstaking work that has gone into it simply because one of its conclusions is not, in our view, politically or economically workable.

Let me start by recognising that, however successful we are in creating a property-owning democracy, a substantial proportion of the population will go on needing rented accommodation for the foreseeable future. This will be either because they cannot afford to buy or because renting suits their particular circumstances for some other reason. It is our firm view that private renting has an important role to play in meeting that future need. With great respect, I cannot accept the assumption of the noble Lord, Lord Seebohm, if I have it right, that the whole of this sector which he estimates, I think, at 30 per cent. should be provided as a social service, if that means provision by local authorities and the public sector. Indeed, I believe that the inquiry itself suggests elsewhere that that should not be the restriction.

The Government therefore welcome the positive approach adopted in the inquiry report towards the role of the private rented sector in future housing policy. We also endorse its view of the importance of finding a way to attract new investment into rented accommodation so that the supply expands. Here we do indeed see the value of the committee's impartiality. It has recognised (and on page 23 it has illustrated) the sharp decline in the private rented sector for almost the whole of this century. In part that has been the result of a growing preference for owner-occupation, and that is natural and desirable. But private renting still has many attractions, particularly for the young and mobile who do not want to take on the responsibilities of home ownership. These needs will continue. It is therefore important to see that the private sector plays a full part in maintaining a good supply of accommodation to rent.

We have done something towards this already with the Housing Act 1980, and shorthold and the assured tenancy scheme in particular, but I believe we can and should do more. There is scope for further legislative change and I should like to take this opportunity to assure the House that in considering what those changes can best be we will look carefully at what the report has to say on the subject and that will be an input into our considerations. We also agree with much of what the report has to say about the role of public sector housing. The report calls for a new approach to the housing functions of local authorities. It states that the aim should be to, strengthen the comprehensive, strategic role of local authorities, increasingly as enablers and co-ordinators, as opposed to their role as providers". The Government share the view that local authorities should move away from being the direct providers of general purpose housing for rent.

I in no way belittle the achievement of local government. Indeed, an understanding of that achievement does much to explain the strength of the municipal tradition that the stature of a local authority is in some way to be measured by the number of the houses and flats it owns and that it plans to build. The normal needs arising from social history were enormously increased—were they not?—by the devastation of the last world war in London and other major cities, as well as in Germany. I saw that devastation as a child; I remember over how many empty blocks the willow herb nodded every summer afternoon after the Blitz.

But I had no conception of the scale of that devastation until I became responsible, amongst other things, for the Royal Parks and discovered that in over 55 acres of Regents Park the grass is growing on up to 12 feet of rubble, spread over it from bombed housing. That is a cubic measure of the damage that was done, and of the repair and replacement that had to be undertaken in 1945 and the years that followed. So I take my hat off to the local authorities for a magnificent achievement.

Bombs exploded during the war and the population exploded after it. Building had to be swift, and inevitably it was partly experimental. Equally inevitably, we are paying the price today. The creation of huge municipal estates, and the use of some types of industrialised systems have left us with a formidable legacy of problems—problems of both management and decay of which the inquiry was acutely aware. The emphasis in future must therefore be on improving the condition and the use of the existing stock of local authority houses, rather than adding to it. New public sector building should be limited to providing for those in the greatest housing need, who are unable to meet their requirements in the private sector. Here I am on common ground with the noble Lord, Lord Seebohm.

The report has much to say of interest about the condition of the housing stock. It acknowledges the progress that has been made in reducing the number of dwellings without basic amenities but expresses concern about problems of disrepair in public and private sectors. As noble Lords will know, the Government published their own proposals for private sector improvement in a Green Paper last year. There is a good deal of common ground between the proposals set out in the Green Paper and those in the report. We are at present studying the responses to that Green Paper. The recommendations in the report of the noble Duke's inquiry will certainly also be very much in our minds as we decide how to take forward our proposals in the light of the comments we have received. It was, I repeat, valuable work, and is input that will result in Government consideration.

I note the committee's reference on page 34 of the report to the "rate of clearance" as being inadequate. This is in connection with getting rid of unsatisfactory stock, and it does have a certain irony in a report marking the centenary of the Royal Commission report. For the Royal Commission, reporting in the wake of the Torrens and Cross Acts, found that clearances of one sort and another were responsible for a great deal of the shortage of housing stock into which they were inquiring, and not least amongst them were clearances to make way for improved stock. I shall quote only one brief instance of that from the earlier report: In St. Luke's the district has never yet recovered from the pressure which was caused by the pulling down for the building of what is known locally as Peabody Town". We must be careful—must we not?—to see that that wheel does not turn full circle. Provision must be made—as it was not made then—for the people who move out of the houses one pulls down to live somewhere else.

That provision need not necessarily be in the form of new accommodation. I am acutely aware that in April of last year, 1985, in the midst of all the misery of homelessness there were over 100,000 local authority dwellings empty; and one-quarter of them had been empty for more than a year. Those figures speak for themselves. More can and must be made of those resources. But nevertheless we need to build as well as to renovate houses. And here I must recognise, as Minister for Planning, our duty to do it without squandering our open spaces and without plundering our countryside.

Your Lordships will be aware of the highly effective urban development grant programme by which we are encouraging building and development by the private sector within existing urban areas, and may also have noticed a recent interesting statistic, recorded by the Ordnance Survey, which shows that in recent years about half of new housing is built on land that has already been developed in the past.

Homelessness is a subject to which we shall return in this debate and it is a significant factor in determining the capital allocations made by the department and by the Housing Corporation. The Government's hostels initiative has resulted in a major expansion in the provision by housing associations of small, modern hostels. Nearly 14,000 of them have been approved since May 1979 and this has been a valuable way of improving provision for single homeless, including those outside the priority need categories of the Housing (Homeless Persons) Act, who are in particular difficulties.

In the public sector, we have recently extended eligibility for housing association grant to short-life council dwellings, and further guidance was issued to authorities in July on how the number of empty dwellings could be reduced by improvements in management practices.

I turn to the stock we already have—the dwellings that have already been built, and I have to say that we are very concerned about the condition of the local authority housing stock. We recently undertook an inquiry into the condition of this stock, and published the result. We undertook it to gain a better understanding of the problems faced by local authorities; it was the first comprehensive inquiry of its kind undertaken by any government in this country. It showed us that there is a very large backlog of repair work indeed. Not all of it is equally urgent or important and we expect authorities to continue their present efforts to identify priorities and to tackle the most urgent work first. However, we have increased the resources available to local authorities for capital expenditure on housing by £200 million compared with last year's provision. Those increased resources, together with the increased emphasis we expect authorities to place on renovation of their own stock, should allow authorities to make inroads into the backlog of their repair works. But the problem will not go away and it is exercising us.

Money is not the only factor. I do not, I repeat, belittle the achievements of some housing authorities, but all of us know of some instances where they are so bad, so remote, so separated from their poorest tenants by so deep a hierarchy of bureaucratic committees that they have actually broken the spirit of the communities that live there, in a wilderness of disrepair. The key to better management is to have a system that provides quick, flexible and sensitive responses to local needs as they arise. That is a need clearly recognised in another report: the report of the Archbishop of Canterbury's commission; Faith in the Cities. I look forward to hearing the right reverend Prelate the Bishop of Liverpool, who was a distinguished contributor to that report. We share their concern.

The Priority Estates Project started by my department has shown how conditions can be radically improved when estate-based management is introduced. We are now reinforcing that approach through the Urban Housing Renewal Unit, which has been set up to advise local authorities on how to tackle the problems of their run-down estates. It will encourage local authorities to consider the full range of options before them. Among those options are partnership schemes with private developers—perhaps involving the transfer of empty dwellings to developers for refurbishment and sale—the encouragement of tenant co-operatives, and community refurbishment schemes.

That new unit has been widely welcomed by local authorities, and one of its particular aims will be to maximise funding opportunities in both public and private sectors, with the assistance of a team of outside consultants—making the money able to be spent. The Government have earmarked £50 million of the Housing Investment Programme allocation total for distribution to local authorities for schemes identified by the unit, in consultation with those authorities. Wherever possible the schemes will result in a diversification of tenure, which we also regard as highly beneficial to the character of a community.

Another way in which we are helping to stimulate private sector involvement in solving housing problems is through the Building Societies Bill. It will enable building societies to play a wider role in the housing market. For example, it proposes to give to building societies an opportunity to own and develop land as a commercial asset. Until now, shared ownership has been achieved through housing associations or local authorities. Building societies have, of course, been involved in many of those projects as providers of finance. In future, they will play a more direct role as owners of the rented portion of the house. That new concept will appeal, I believe, to the inquiry committee. The Bill will also give building societies the power to offer agency services advising owner-occupiers on the improvement of their homes. We also want to encourage building societies to become much more closely involved in the revitalisation of run-down council estates, which are a matter of great concern.

To conclude, my contribution must be as yet incomplete. We are still only at the beginning of an interesting and, I think, important debate. I have sought to provide both a commentary on some aspects of the report and a summary of some aspects of Government policy. I need no reminding that these are matters that demand our urgent attention.

Your Lordships will have noticed the common ground between the inquiry and the Government, as well as the differences. Your Lordships will also have noted that the report itself—which will be strengthened, may I say, by the eventual publication of two technical volumes which we expect in May—will be taken into full consideration in the development of various aspects of Government policy.

I look forward with great interest to hearing in the next few hours other comments that may be of material help in preparing the ground for further progress. I am grateful to the noble Lord, Lord Seebohm, for this opportunity to do so and, with the leave of your Lordships, I will give a preliminary reply to what I hear this afternoon at the end of the debate.

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