Local Authorities: Job Creation (Hansard, 4 June 1992)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde)
My Lords, the Government believe that local authorities already have appropriate powers and resources. They have the discretion to decide what should be done to create jobs in their own individual areas. We have no plans to provide any additional incentive to local authorities.

§ Lord Molloy
My Lords, I am grateful to the noble Lord for that reply. I hope that those local authorities who are complaining will take note of what he said because there are many who wish to increase their housing production, the building of welfare centres and, indeed, administrative centres. The construction industry believes that it can build some of the projects that local authorities feel they ought to have. Therefore, I should be most grateful if the proposition of the Question could at least be considered.

§ Lord Strathclyde
My Lords, I am always eager to satisfy the noble Lord, Lord Molloy. He may be very pleased to hear that this year, 1992–93, total council spending by central Government is some £30 billion. We are spending £700 million on schools; £1.7 billion on hospital buildings by the NHS; an extra £68 million for prison refurbishment and 21 new prisons over the next two years; £325 million for maintenance and repair and £106 million for new buildings. We are spending the money and no doubt the construction industry will be one of the beneficiaries of that.

§ Lord Mellish
My Lords, will the Minister be good enough to say something extra about the local authority money—which was gained through the sale of their own council properties, and which I endorsed —which is being held by the Government, thereby preventing local authorities from building?

§ Lord Strathclyde
My Lords, of course this is an old chestnut that comes up from time to time. I think that the whole House realises that if we were to relax the rules on capital receipts those areas that happen to get the highest receipts would then be in the position of being able to spend more money, whereas the current system depends on need rather than on high capital receipts.

§ Lord Dean of Beswick
My Lords, in his Answer to my noble friend Lord Molloy the Minister implied that the Government had no additional plans to involve the local authorities. But frequently the Government have quoted the Audit Commission's report when it suited them and when it was in support of their policies. Is the Minister aware, as I am sure he is, that the very recent report by the Audit Commission on the question of local authority housing, while making some criticism of local authorities makes a very strong case that the Government are leaving local authority housing drastically underfunded. Bearing in mind the point made by the noble Lord, Lord Mellish, this is not a chestnut, it is a reality. The Audit Commission is saying quite clearly that billions of pounds are needed to put the existing council houses in stock and bring them up to a sufficient state of repair with reasonable amenities. Will the Government for once take another look at the situation and do something positive in this matter?

§ Lord Strathclyde
My Lords, what I am aware of is that the noble Lord, Lord Dean of Beswick, has that Question down on the Order Paper for Wednesday, 10th June. I shall be delighted to answer it then.

§ Lord Hylton
My Lords, has the Minister read reports claiming that between now and the end of the year some 300,000 construction workers are likely to be laid off? Does that not give an excellent opportunity to build affordable housing rather sooner?

§ Lord Strathclyde
My Lords, I have every sympathy with the construction industry and those people who worked in it but who have lost their jobs over the past couple of years. However, there is some good news on the horizon. In the first quarter of 1992, new orders were up by 3 per cent. compared to the fourth quarter of 1991, and by 4 per cent. on the first quarter of 1991. We can already see that there has been a substantial improvement.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that although we have had this Question many times, part of his Answer is new, at any rate to me? It is that although some areas have money they cannot spend it because other areas do not have money. Why prevent those which are in a position to do something from doing so because others cannot? It 1024 seems to be a principle that runs against the general idea for which I believed the Conservative Party stood.

§ Lord Strathclyde
My Lords, there are several principles at stake here. The first is that we must control public expenditure. Money spent by local authorities adds to overall public expenditure. Secondly, money which comes from capital receipts is spent partly on redeeming debt, and that is an important factor. The third principle is the one I outlined to the noble Lord, Lord Mellish.

§ Lord Mackie of Benshie
My Lords, has the Minister read the interesting report which highlights the fact that homelessness in rural areas is higher than it is in many inner city areas? The reason is, of course, that many council houses in the country have been sold thus reducing the stock. Added to that, the buying of houses for holiday homes has produced a serious situation. Surely, the release of money to rural areas to build houses would benefit many people.

§ Lord Strathclyde
My Lords, the sale of council houses in itself does not reduce the overall housing stock. On the question of homelessness, especially in rural areas, the Government have taken many initiatives during the past few years to improve the situation.

§ Lord Stoddart of Swindon
My Lords, is the Minister aware that as a result of a well-directed shaft from his noble friend Lord Harmar-Nicholls, he appeared to change his ground on the use of housing resources? In his first supplementary answer he appeared to say that there were some areas that had a great deal of money but no housing problem and they should not be allowed to spend the money while, on the other hand, there were areas with a housing problem which did not have much money. That may have been reasonable, but then in his reply—

Noble Lords
Question!

§ Lord Stoddart of Swindon
Yes, I am coming to that. In reply to his noble friend the Minister said that the matter was one of control of public expenditure. Will he explain what is government policy, because those councils with a housing shortage which are desperate to build new houses and which have a great deal of money would be interested to know the real reason?

§ Lord Strathclyde
My Lords, I hope that the noble Lord will accept that the two answers are compatible. There are two different reasons for coming to the same conclusion. We do not want to overspend from the public sector, and we do not want local authorities which have had substantial receipts to be able to spend all that money in one go in their local areas. Furthermore, the whole provision of social housing —if I may call it that—is not just the preserve of local authorities. Housing associations and the private sector are making great inroads into the provision of that housing.

§ The Countess of Mar
My Lords, have any calculations been made as to the cost to the Inland 1025 Revenue of lost taxation and the cost to the Department of Social Security of paying unemployment benefit and income support set against the cost of having construction workers employed on building houses for homeless people? There is also the cost of homelessness and bed-and-breakfast accommodation. Have those calculations ever been made, or do not the different departments speak to one another when it comes to costings?

§ Lord Strathclyde
My Lords, the question is substantially wide of the Question on the Order Paper, but I am conscious that part of it will be answered in a few minutes by my noble friend Lord Henley.

§ Lord Stallard
My Lords—

§ Lord Skelmersdale
My Lords—

§ The Lord Privy Seal (Lord Wakeham)
My Lords, my noble friend was seeking to ask a question. I wonder whether we could have one more question and then move on.

§ Lord Skelmersdale
My Lords, is my noble friend aware that there is one way to resolve the dilemma posed by the Question asked by the noble Lord, Lord Molloy; namely, that as local authorities can use 100 per cent. of their capital receipts for building for immediate resale that would be an excellent way for them to help the construction industry in these difficult times?

§ Lord Strathclyde
My Lords, my noble friend makes an interesting and useful point. It is one that I am pleased he has brought to the notice of the House.

§ Lord Williams of Elvel
My Lords, with the greatest respect to the Leader of the House, we have a certain amount of time to spare, if I may say so. May I therefore put to the Minister another question, if the Leader of the House will permit me? In his Question my noble friend refers to undertaking new industrial projects. As I understand it, in response to the noble Lord, Lord Mackie of Benshie, the Minister said that local authorities were undertaking plenty of new industrial projects. Will he give examples of where local authorities have been encouraged by the new, dynamic, all-seeing, all-dancing Department of Trade and Industry to introduce new industrial projects into the rural areas about which the noble Lord was talking?

§ Lord Strathclyde
My Lords, that is not the role of the Department of Trade and Industry; it is the role of local authorities which can often be key players in creating job opportunities or regenerating run-down sites. Perhaps I can expand. That input can take various forms: the assembly of land for sale to a developer; the provision of infrastructure to new or regenerated industrial or office sites; and the bringing together and co-ordination of interested parties from the public, private and voluntary sectors. Many local authorities provide advice centres or funding for local enterprise agencies. There is an enormous amount that local authorities can achieve and do achieve. I hope that that will continue.

§ Lord Molloy
My Lords, is the Minister aware that the construction industry has tens of thousands of skilled artisans who are now unemployed, and expert managers who cannot find jobs? If he would only agree that the principle of the Question should be examined, I feel sure that he would be rewarded, because the construction industry would be willing to supply him with information so that local authorities which need schools, hospitals and welfare centres could be provided with them and construction industry unemployment could be reduced.

§ Lord Strathclyde
My Lords, I am hopeful that with the extra money that the Government are providing this year for substantial infrastructure projects the construction industry will be one of the main beneficiaries.