§ 7.51 p.m.
§ The Earl of Dundee rose to move, That the draft order laid before the House on 3rd May be approved. [25th Report from the Joint Committee.]
§ The noble Earl said: My Lords, perhaps it will be helpful if I say a few words about the background to the order.
§ Under the housing defects legislation eligible owners of designated properties are entitled to a local authority grant to reinstate their property or, if repair is not feasible, to repurchase by the authority at 95 per cent. of the defect-free value. The legislation sets out certain conditions on which the authority has to be satisfied before it can offer assistance by way of grant for reinstatement. One of these tests, Test D, requires an authority to repurchase if the direct cost of repurchase is any less than the cost of grant.
§ We consider this test to be too restrictive, particularly where the difference in cost is small, since, as matters stand, owners have to have their houses repurchased even where they and the local authority would prefer reinstatement. We have therefore decided that this test, which imposes a strict comparison between repurchase and grant costs, should be removed from the conditions for reinstatement grant. This change will not, however, affect the other value-for-money condition—Test C—which will continue to require an authority to have regard to the amount of reinstatement grant that would be payable compared with the likely value of the house, with vacant possession, after repair.
§ I must tell your Lordships that few, if any, Scottish local authorities have reached the stage where they require to balance the cost of reinstatement grant against repurchase. We have a situation in Scotland where a relatively small number of houses—just over 600—are eligible for assistance. According to local authority estimates, 137 of those houses had been repurchased by 31st March 1988. Current information also suggests that by this date only one house has been repaired (by a non-precast reinforced concrete homes licensed scheme). The balance of about 480 houses have little or no prospect of being reinstated in the foreseeable future.
§ The lack of interest on the part of repairers or designers in developing repair systems for any of the 12 designated house types in Scotland is certainly a matter for concern. But a market of fewer than 500 eligible houses and 12 different house types is understandably not likely to be considered an economic proposition by any repairer or designer.968
§ The order is thus unlikely to be of immediate benefit in Scotland but it is only right that if and when Scottish local authorities find themselves in the position of weighing the economics of reinstatement against repurchase they should have the benefit of the more flexible arrangements which this order gives to them. I therefore commend the order to your Lordships. I beg to move.
§ Moved, that the draft order laid before the House on 3rd May be approved. [25th Report from the Joint Committee]—(The Earl of Dundee.)
§ Lord Carmichael of Kelvingrove
My Lords, we are all grateful to the Minister for explaining the order. He will be aware that orders always contain a great many cross-references and it is difficult to follow them all through. Therefore I must thank him for helping us to understand it. I was going to ask him how many houses were involved, but he told me that early in his remarks. There are obviously 600 households involved. It is also interesting to note that the local authorities have repurchased 137 houses. I wonder whether they form part of the 600 or are additional; in other words, did 730 houses become 600 when some were sold?
I am concerned about one point on which the Minister may be able to help me. It relates to the last paragraph in the explanatory note, which states:This Order provides for that particular condition to be omitted. Under Section 266(4) of the Act, the Order does not affect an application for assistance made before the date on which it comes into force".That provision may not be fair. There may have been families which have complained for a long time and as a result the Government recognised that the order was necessary. Therefore those people who complained and triggered off the process by writing to their local authorities, offering their houses to the local authorities and trying to obtain help with the repairs, are the very people who, if they fall within the last paragraph of the explanatory note, would not be able to apply for the grant. I am thinking of houses in the Ayrshire area where for a long time people have been trying to get repairs done. There have been deputations to Parliament and they have plagued their local MPs, but such people may not be favourably caught by the order.
The Minister also said that there were fewer than 500 houses of 12 different types involved. That is an average of almost 40 houses per type, although there may be a wide variation. I should have thought that would allow a decent builder scope to spend some time and money and perhaps even go to the Glasgow School of Building, or Strathclyde University, which specialise in finding answers for the small man to some of these difficult problems. The Wimpeys and the big people have their own resources for solving problems but the smaller builder does not.
There are ways of finding solutions to the problem. If some of the types of houses are represented by only two or three houses it may not be possible to provide the necessary repairs on anything like an economic basis. I should have thought that some of the 500 houses would be repairable and that the research departments of a building association, laboratory or school would find the problem a challenge and would be anxious to find a solution.
969 I do not necessarily expect the Minister to be able to answer now but these questions have been put to me, in particular by some people in the Ayrshire area who approached me on this subject some time ago. I am glad that the Minister has given the explanation and that the order has been put through, although it is not as all-embracing as I or the people affected by defective houses should have liked. Nevertheless it is an important step in the right direction.
§ 8 p.m.
The Earl of Dundee
My Lords, I am grateful to the noble Lord, Lord Carmichael, for his comments. In regard to the figures, I can reassure him that the 137 which I quoted is part of the 620. The noble Lord referred to the cut-off date and said that this might give rise to some unfairness to people who happen to have come before that date. We are dealing here with a safeguard. We have had only one case of reinstatement and so I would not expect anybody to be disadvantaged.
Perhaps I may explain a point which I may not have brought out sufficiently in my opening remarks. I refer to the effect of this measure in terms of greater flexibility, which we have not had until now. In coming to a decision local authorities will still have to consider Test C. They will have to have regard to the amount of reinstatement grant that would be payable compared with the likely value of the house with vacant possession after repair. But, first, "having regard to" is more flexible than the strict mathematical comparison in Test D; and, secondly, because reinstatement usually gives a degree of betterment, the value with vacant possession after repair will normally be higher than the 95 per cent. of defect free value of Test D.
I hope that those few remarks may be of reassurance to the noble Lord. I thank him again for his positive reception of the measure.
§ On Question, Motion agreed to.