HL Deb 21 May 1990 vol 519 cc595-7

2.55 p.m.

Lord Dean of Beswick asked Her Majesty's Government:

What resources are available to housing associations and whether these are sufficient to enable them to carry out the functions laid on them by recent legislation.

Lord Reay

My Lords, Her Majesty's Government plan to increase the Housing Corporation's programme of grants and loans to housing associations from £938 million in 1989-90 to £1, 736 million in 1992-93. Associations are also now able to draw in private loan capital to help finance their grant-aided schemes. As a result associations will be able to fulfil their role under the Government's housing policies as main providers for the future of new homes for low income households.

Lord Dean of Beswick

My Lords, is the Minister aware that his Answer does not accord with the housing associations' view of the situation? Is it not a fact that the Government brought forward £120 million in January from this year's allocation to cover last year's expected overspend? The effect of that was to cut the target for approvals this year from 24, 000 units to 19, 500. The associations now believe that the figure could be reduced to 10, 000. The Government have stated repeatedly that they no longer view councils as builders of houses but only as enablers and that the charity organisations will take their place. Do the figures not indicate that the Government are failing abysmally in what they are trying to do?

Lord Reay

My Lords, on the noble Lord's first question, a new financial regime was introduced on 1st April 1989. It resulted in housing associations bringing forward their schemes faster than had been anticipated. That factor resulted in £120 million worth of capital expenditure which was originally planned to be used by the Housing Corporation in 1991 being spent in 1989-90. A corresponding decrease has been made for 1990-91. If the two years are taken together the number of new homes that housing associations will provide is expected to remain as planned. A faster rate of spending will mean that new homes will be ready sooner. That must be a good thing.

Lord Dean of Beswick

My Lords, it was predicted that 27, 000 units would be produced in 1991-92. Unless there is a further increase in funding the figure may reduce to 7, 000 over the two years. Does that not indicate that the situation needs looking into? Mr. Splcer, the Housing Minister, ought not to continue to reject overtures of the housing associations as he did last week.

Lord Reay

My Lords, I do not accept that. The output of houses is expected to double from 1988-89 to 39, 000 by 1992–93.

Baroness Fisher of Rednal

My Lords, I am a little worried by the reply that the Minister gave. I am a member of a housing association. Last week we received a long letter from the director of the Housing Corporation on the difficulties of finance, which were described as considerable. Perhaps I may read part of it. Writing to housing associations the director of the Housing Corporation stated: I am aware of the serious financial difficulties caused to housing associations by the failure of the Housing Corporation to forecast its cash flow". That is contained in the letter—

Noble Lords

Question!

Baroness Fisher of Rednal

My Lords, will the Minister investigate the letter from the director of the Housing Corporation which has made it extremely difficult for those housing associations which had approval to carry on with their programmes only to find now they are without cash until the end of this year?

Lord Reay

My Lords, I appreciate that a difficult situation may arise for some assocations which were expecting to be able to bring forward plans which must now be postponed. However, I am confident that the corporation will do what it can to minimise the problem. I do not believe that the difficulties should be exaggerated. Forty thousand new homes are now being built under schemes which have been approved. We are confident that housing associations can expand to achieve what is asked of them. Indeed, they are already putting forward more schemes than the Housing Corporation can accommodate in its programme.

Lord Dean of Beswick

My Lords, does not the last question bear the truth? Is is not the case that the housing associations, through the Housing Corporation, are ready to meet an expanding need but the Government are not prepared to find the money?

Lord Reay

My Lords, no. As I said in my original Answer, the Government plan to increase the Housing Corporation's programme from more than £900 million to £1, 700 million in the next three years. That is a substantial increase.

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