Council House Building: Finance (Hansard, 23 April 1990)

§ Lord Hesketh
My Lords, any government has to control gross public spending, including spending from receipts, in order to regulate the national economy. Allowing those local authorities who happen to have a lot of receipts to spend more would mean cutting expenditure in areas of more acute need. The aim of our reforms of the use of receipts is to enable us more effectively to target resources on those areas in greatest need.

§ Lord Jay
My Lords, what possible good reason can there be for preventing authorities from using their own funds to build low-cost housing, which everyone agrees is one of our most acute social needs at present?

§ Lord Hesketh
My Lords, I am sure that, with his experience, the noble Lord, Lord Jay, is more aware than I am of the importance for any government to control the gross figure for public expenditure. It is well worth remembering that the latest available figure for the current level of local authority housing debt is some £29-54 billion.

§ Lord Molloy
My Lords, is the Minister saying that the Government lay greater emphasis on saving money and reducing costs than on reducing the massive number of homeless families in this country?

§ Lord Hesketh
My Lords, I am sure that the noble Lord, Lord Molloy, is aware of the Government's most recent initiative of increasing expenditure for homelessness by some £250 million. He will also be aware that the Government are increasing the expenditure by housing associations to some £138 million in 1991-92.

§ Lord Stoddart of Swindon
My Lords, is the noble Lord aware that one of the arguments that the Government always used for selling council houses was that selling them would enable local authorities to build more houses for rent with the proceeds of those sales? What has happened to that argument?

§ Lord Hesketh
My Lords, 25 per cent. of the receipts are still available to do exactly that. However, as a result of capital reforms that we introduced in last year's Bill, we have been able 317 substantially to increase HIP allocations from a third to two thirds on the basis of targeting. The provision of housing and the requirements for the provision of housing vary greatly between regions. That is why we have been able to improve the targeting to those areas which need it most.

Lord Wallace of Coslany
My Lords, will the Minister give us advice that is a little more sensible? Is he aware that thousands of young couples who want to get married but who wish to avoid unnecessary expenditure in buying a house are desperately searching for houses to let? Does he agree that there is a shortage of such accommodation throughout the country, that the situation is becoming critical and that something should be done about it?

§ Lord Hesketh
My Lords, in recent years the Government have increased finance beyond the traditional figures of local authority provision and that provided by housing associations. We believe that the changes that took place in the Budget with regard to the business expansion scheme will provide in the first 12 months a further 7,000 units to be available under assured tenancies. Those are extremely important. At the moment there are only two types of housing. We have to follow the success that has been achieved in the United States, West Germany and France, which has a socialist administration. There, 30 per cent. of the population are in private rented accommodation. That was destroyed in this country over a period of 50 years.

§ Lord Mellish
My Lords, is the Minister aware that Southwark Council is owed £32 million in rent arrears.? I assume that some action will be taken to get back some of that money. Can the Government confirm that the council will be able to spend the money on new housing?

§ Lord Hesketh
My Lords, the rules are different for revenue and capital. As I pointed out earlier, if there were a reduction of debt, which relates to the 75 per cent. that is held back, that would improve the financial position of the council.

§ Lord Dean of Beswick
My Lords, does the Minister agree that the true Answer lies in the replies that have quite recently been given by Ministers from the Dispatch Box to the effect that the Government no longer consider local authorities as bulk builders of accommodation to let? Is he aware that the Government's target of 80,000 such properties to be built over the next three years, 17,500 of them in the first 12 months, is already falling short? If my information is correct, that target will be over 2,000 units short. Can he say whether it is true that some of the money allocated has more or less been allowed on pawn from the Housing Corporation, which now finds itself in extreme difficulty? Does he agree that it looks as though the whole programme will literally be off gear and well below what the Government intended? In view of the urgent need will the Government allow local authorities with capital receipts to get on with building this type of housing?

§ Lord Hesketh
My Lords, the Government have no desire other than to improve the quality and supply of housing. As the noble Lord will know, and I have said it before in this House, the Government see the local authorities as enablers in housing. They are spending very considerable sums of money but they also wish to broaden the spread of housing. They are also desirous that the money spent on housing should produce quality rather than result in the tragedies —because that is the only way that one can describe them —seen in some of the great cities of this country.

§ Lord Dean of Beswick
My Lords, I am sorry to come back so quickly. Only a few weeks ago at the Dispatch Box the noble Lord said—and other Ministers have repeated quite categorically—that the Government no longer see local authorities as building houses in bulk for letting to people at the bottom end of the social scale. Is that true or not?

§ Lord Hesketh
My Lords, local authorities already own a vast store of local authority housing. The noble Lord asks me how we see the future. The future that we see is one where there is a spread; one in which there is a ladder that goes from the simplest to the less simple accommodation, and also across a spectrum of cost, so that people can have an aspiration which can be satisfied to rent a house that is other than an ordinary local authority dwelling.

§ Lord Milverton
My Lords, is my noble friend saying that the Government are aware of a need for far more low cost housing? There are many people like myself—and others have also said this—who see such a need. Are Her Majesty's Government awake to the necessity to meet the need for low cost housing for the many people who desperately require and wish for it?

§ Lord Hesketh
My Lords, the Government are certainly aware of the need. That is why they introduced the special increase of some £250 million for the homeless. There is also another factor. If we consider rural housing, where there are equally difficult problems although of a different nature, it is clear that one of the most difficult things to obtain is planning permission in order to provide that accommodation.

§ Lord Jay
My Lords, does the Minister agree that it would be better to have a little more consumer choice and allow local authorities to spend their own money as they wish?

§ Lord Hesketh
My Lords, the Government are entirely in favour of consumer choice but they do not believe that the local authorities' money is in fact their money; it is the taxpayers' money.