Homelessness: Local Authority Housing (Hansard, 5 February 1991)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch)
My Lords, we do not propose to change the present rules on the use of capital receipts by local authorities. It is government policy that new subsidised housing for rent should principally be provided by housing associations with local authorities fulfilling an enabling role. If authorities were allowed to spend all of their capital receipts, areas of lower housing need would tend to have more to spend while areas of greater need would tend to have less. We introduced the new capital finance system in April last year to overcome this problem and to allow us to target higher levels of credit approvals where the need is greatest.

§ Lord Jay
My Lords, this Government's housing policy has produced a record number of homeless 1066 families—more than 130,000—and the attempt to build low-cost houses through the private sector has proved almost a total failure. Therefore, what conceivable reason is there for continuing this senseless restriction?

§ Baroness Blatch
My Lords, I profoundly disagree with the noble Lord's comments. The number of homeless people remained almost static during the 1980s. There are 2 million more houses than there were in 1979. Credit approvals for local authorities have increased; housing revenue subsidy has increased; housing corporation finances have increased; home ownership has increased from 50 per cent. to 69 per cent.—I could go on.

§ Lord Rippon of Hexham
My Lords, while recognising the truth of my noble friend's remarks, does she agree that at present the construction industry is not overheated and that there remains a real need for low-cost houses to buy and to rent? In regard to capital receipts, should not the Government apply their principle of accountability of local authorities to the local electorate?

§ Baroness Blatch
My Lords, we have done a great deal in respect of the rented sector. We have introduced a process of deregulation which has helped the situation. It might help even more if members of the parties opposite would cease continually threatening to repeal deregulation. That has done a great deal to knock confidence in the rented sector. The situation in the construction industry has not inhibited our plans for housing associations to produce about 40,000 new houses in each of the next three years.

§ Lord Molloy
My Lords, is the Minister aware that families whose homes were repossessed because they could not pay their mortgage cannot be helped by housing associations because they assisted such families to acquire the house in the first place? Therefore, the local authorities are left to rehouse these families and sometimes the authorities are compelled to allow them to jump the housing queue. All that is at great expense; probably more expensive than if we had not meddled about with interest rates.

§ Baroness Blatch
My Lords, the noble Lord has mixed up many problems in that statement. I am addressing the subject of housing. The Government are taking many steps and I have named some of them. We have allocated £50 million to help rural areas; £270 million towards state action programmes; and £300 million in addition to main-stream funding to help the statutory homeless. I take this opportunity to congratulate the building societies which are going to enormous lengths to assist people and therefore avoid repossession.

§ Lord Hylton
My Lords, the Minister referred to housing associations. Is it not the case that even if their current output were doubled or trebled it would be inadequate to meet the need?

§ Baroness Blatch
My Lords, one cannot get away from demographic change. More young people are leaving home and requiring somewhere to live. People 1067 are living longer. That is good but it puts a demand on housing stock. I believe that we are doing what is practicable given the available resources and the fact that all the money we spend comes from taxpayers.

§ Lord Glenamara
My Lords, did the Minister notice that the number of homeless people became significant when the Government began to sell off council houses? As the number of council house sales increases so does the number of homeless people. Why do not the Government recognise the correlation between the two and stop the foolish policy of deliberately reducing the pool of low-cost houses for rent?

§ Baroness Blatch
My Lords, I disagree profoundly with the noble Lord's comments. The total number of homeless people remained almost static throughout the 1980s. Most people who purchased their council houses would still be living in those houses had they not done so. However, they are now more satisfied because they are home owners instead of merely tenants.

§ Lord Skelmersdale
My Lords, since we are always being told that local authorities are so impoverished will my noble friend tell the House how many local authorities spend up to the 25 per cent. capital receipt level, as they are allowed for this or any other purpose? Further, can my noble friend confirm that local authorities are allowed to spend 100 per cent. of their capital receipts for the purpose of immediate resale of houses to poorer people?

§ Baroness Blatch
My Lords, my noble friend is right in regard to his second question. We do not yet have statistics showing the number of local authorities which will spend up to 25 per cent. under the new scheme because this is its first year. The record was patchy for the old scheme and it was changed following reports on it.

§ Lord Jacques
My Lords, will the Government bear in mind that although housing is a complex subject it is a key problem? The less the Government succeed in solving the housing problem the more they multiply other social problems.

§ Baroness Blatch
My Lords, the noble Lord makes an important point. Housing is a key issue and the Government take it most seriously. Their record compares favourably with that of the previous government. At the end of the day one can do only what is practicable. The money that we spend on housing comes from the taxpayer.

§ Lord Moyne
My Lords, is there not a particular shortage of housing for young people who are not yet in a position to buy their houses? Is it not beyond the power of the well-supported housing associations to meet the whole of that demand?

§ Baroness Blatch
My Lords, my noble friend makes the important point that housing is a particular difficulty for young people. The reduction in inflation will go a long way towards helping them. Many 1068 building societies and housing associations are resorting to a number of mechanisms to help young people to become home owners.

§ Baroness Fisher of Rednal
My Lords, the Minister has paid great credit to the housing associations, but is she aware of the utter confusion that arose in the past year during the Government's change of financial policies? The result is that many associations which were building low-cost housing for the homeless had to stop doing so because of the cut-back in the grant from the Housing Corporation? That is a well-known fact. May I remind the Minister that, as a result of the sale of council houses, local authorities could have the money? All they need to do is work with building societies and housing associations in order to build houses for the homeless. That is what we are interested in, not statistics.

§ Baroness Blatch
My Lords, whatever problems the noble Baroness may attribute to the housing associations, the reason for those problems is not a cut in funding. The Housing Corporation received 35 per cent. extra in its funding this year and by 1993 it will have received an 88 per cent. increase over the current year. Therefore, the noble Baroness is not right in what she says.

§ Lord Dean of Beswick
My Lords, is the Minister not aware that her answers to my noble friends Lord Jay and Lord Glenamara were lacking in her usual candour? She said that in the 1980s the numbers of homeless remained static. However, the statistics issued by her own department demonstrate a dramatic increase. Is it not also the case that the house building programme in local authority areas has collapsed because since 1979 financial assistance from the Treasury to building programmes in the public sector has been reduced from over £5 billion to less than £1 billion? Bearing in mind that between £3 million and £4 million of public assets are doing nothing and that the building industry employment force will be cut by 100,000 people in the next year, will the Minister ask her department to see sense and unlock some of those resources so that the building industry can build houses for the benefit of all?

§ Baroness Blatch
My Lords, it is not that the money is not being used. Seventy-five per cent. of the money is reducing debt and 25 per cent. is applied to capital building. Secondly, the noble Lord and the Government must agree to disagree about the fact that he believes that only local authorities should be the direct providers. We believe that it is important that houses are built and that local authorities should be enablers.

§ The Lord Privy Seal (Lord Waddington)
My Lords, your Lordships may feel that it is now appropriate to move on. We have spent 24 minutes on Questions and there is still another to be answered.