New Towns (South-East)

HC Deb 08 November 2000 vol 356 cc67-86WH

11 am

Mr. Tony McWalter (Hemel Hempstead)

I have asked for today's debate because I represent a new town and I, and other Members of Parliament for similar places, are concerned about a range of matters. My object today is to establish that the aggregate effects of Government policies for new towns, particularly in the south-east of England, do not satisfactorily tackle the needs of those communities. I am happy for other hon. Members to intervene during my speech, because I want the debate to reflect the fact that the concerns that I shall describe go well beyond my constituency boundaries. In addition to providing an opportunity to discuss those concerns, perhaps the debate will allow the sense of grievance that has been growing to be aired.

I do not, of course, want to suggest that a Government Department has it in for new towns. Rather, a series of initiatives threatens, severally, the welfare of new towns. Jointly, those initiatives add up to an agenda for decline. I shall explain why new towns are right to feel worried about the future. I hope that the programme for redress that I shall recommend will commend itself to the Government, who are the successors of those who founded the new towns—largely successfully—50 years ago.

Why do new towns have a special problem, if, indeed, their foundation has been in many ways a success? Do they not incorporate features that many other towns and cities would want to emulate? The problems originated in the foundation of the new towns. They were not merely built, but planned. It must be admitted that much of that planning was successful, although that aspect of the matter is not what I am principally concerned with today. Much has happened since the planning of the towns, and it is those changes that have caused trouble.

First, and most obviously, the original new town residents have grown older. Facilities designed for an estate on which every family had children and where there were few elderly people might not be at all suitable for an elderly population. We must ask whether the original planners understood that one day their designs for new families would have to serve the needs of an older population. Did they approach their design in such a way as to provide for the needs of those aged over 70? What foresight did the original planners show? In some ways, their vision was defective.

A second dimension to the new towns problem is that the facilities have also grown older. Some of the original facilities were built to last and do not show undue signs of age. The council houses built in the late 1940s to Parker Morris standards, for instance, may well have needed significant maintenance in their lifespan, but they were built well and those who live in them find that such houses can be adapted to their needs as they grow older. Indeed, I live in one.

Other facilities lack such good design. To cope with a large number of young children in the new towns of the 1950s, system-built schools were put up. Those buildings depended heavily on asbestos as a prime building material, and most were jerry-built. In the first decade of the 21st century, they are mostly beyond their natural lifespan, and what is worse, they have all reached that stage together. A system that was ageing in the 1990s has arrived at its dotage.

I do not suggest that the Government have not been aware of the needs of new towns. In my constituency, many schools have a mixture of old, and bright, new buildings, which have been constructed to a much higher standard. That is a tribute to the Government, who have tackled a problem that was heretofore ignored. However, the pace of change is too slow, and because of the scale of the problem, the overall effect, even given recent initiatives, is that the condition of the school estate worsens year on year. When buildings that were not well designed age together, much stronger measures are needed than hitherto.

A third dimension of the problem is that certain social changes were not envisaged by the designers of new towns, which is not surprising. They did not plan for communities to change organically, and action taken by successive Governments since then has constrained those communities in their need for such growth. The original designers of the blueprint had a vision of what constituted a community: a cluster of houses around some green space, in the middle of which would be a small shopping centre, to which local residents would walk; one large pub, which all members of the community could use; and a community centre to service a great variety of social activities. When one walks around Hemel Hempstead, one could be forgiven for wondering whether one is in Stevenage, because the same blueprint was adopted.

In some ways, the blueprint was resilient. The community centres, for example, play an important role in the life of new town communities, although in general they are used much more by older people than by the young. Younger people often hang around the shopping centres, which as a result do not have quite the community focus that the original planners envisaged. Indeed, the standard shopping trip now is not a walk to the neighbourhood shop, but a drive to a massive supermarket from a road that, even at that late stage, was planned in the belief that few residents would have cars. In some new town areas, the lack of car-parking facilities leads to ugly disputes among neighbours.

In many other ways, too, the original planners were unaware of how community needs would develop. In my constituency, we need a mosque for the 3 per cent. of my constituents who are of Muslim belief. At present, a private house, with inadequate facilities, fulfils that function. None of the original planners would have thought that the town might need such a facility somewhere central.

New towns need scope to grow organically. Successive Governments have, to put it mildly, constrained the capacity of new town residents to tackle the problems that they face in their daily lives. The problems inherent in the flawed blueprint that I described—as I said, it is flawed only in patches—have been exacerbated by a deficiency in resources, which is hard to explain clearly. Some people have even been confused about what can be meant by the title of this debate. I am thinking particularly of resources in land and of financial resources vouchsafed annually to those who control the destiny of our communities. The history of that resource allocation system is important. We must understand the operation—labyrinthine though it is— of the Commission for the New Towns. If we do not, we will not understand the scale of the problem facing new towns today and why the Government must give the matter much more urgent attention.

Some people might ask, "Why are you worried about Hemel Hempstead? Isn't it fair that, in deciding the overall allocation of resources, the Government should take something away from such privileged areas, where there are unemployment rates of, for example, 1.6 per cent., and give it to others?" The trouble is partly that there has been a resource-abstraction mechanism from new towns since the Domesday book. The Commission for the New Towns has been required to take resources away from new towns in a way that is prejudicial to their interest. In the last year of its operation, the commission contributed around £160 million to the Exchequer.

Laura Moffatt (Crawley)

I thank my hon. Friend for allowing me to intervene on that important matter. I wish to focus on the issue of paying for new facilities, particularly housing, in new towns—many of which are twice the size originally envisaged. Is my h F aware that 500 new houses have been built in Crawley over the past five years for people who have been excluded from the market, for the economic reasons that he mentioned? How can such a problem be redressed in the new proposals for resource accounting, so that we continue to ensure that people who are excluded from the market because of the sheer enormity of housing prices can still live in our new towns?

Mr. McWalter

I thank my hon. Friend for her intervention. She is good at making all hon. Members aware of the problems that Crawley new town faces. I shall deal later with housing resources—a significant source of trouble to some of us in the new town sector—and particularly with the definition of that phrase. There is a philosophical continuum between the old ideas of the Commission for the New Towns—CNT—and what is happening now.

A specific problem is that, once new towns were established, it was thought that they had been the recipients of considerable resources from the rest of the country. As they were new communities that had to make their way in the world, however, it was not deemed appropriate to vest all the functions of community governors in the local authorities. The view was taken that another authority had to be created, in addition to the normal local authority, to ensure that appropriate quantities of taxpayers' investment were pulled out to repay the rest of the country for having established such privileged habitations. The new agent, the CNT, was therefore established—consisting of those with experience of governing communities—and enjoined to ensure that the considerable resources ploughed into the new communities were not frittered away or wasted by immigrants from places such as the east of London. The CNT oversaw the inauguration of the new towns and, as they became more established, its role was to make a return to the nation of at least some of the resources that the new towns had, as it were, taken.

Barbara Follett (Stevenage)

I thank my hon. Friend for allowing me to intervene in this important debate. As he will know, it cannot be said that the Commission for the New Towns discharged its remit in Stevenage very well. It fragmented the ownership of the town centre in such a way that it is impossible to redevelop it properly. Will my hon. Friend and others who represent new towns consider what the now reformed Commission for the New Towns, which has been absorbed into English Partnerships, could do to redress the errors in its management of those new towns over the years?

Mr. McWalter

My hon. Friend well illustrates a reason for the problem. It is interesting that the financial memorandum under which the Commission for the New Towns was established instructed it precisely not to subject parcels of land to such treatment, but to work with the local council and community to ensure that such fragmentation and inefficiency in patterns of ownership would not occur. I agree that we must try to evolve a new way of going forward that will deal with the problem satisfactorily. Since securing the debate, and following recent discussions with the CNT's successor body, English Partnerships, I have however experienced some joy at the way in which it has responded to some of my requests. I can see the first signs of a brightening dawn on the horizon.

The interventions of my hon. Friends the Members for Crawley (Laura Moffatt) and for Stevenage (Barbara Follett) have established that I am not alone in thinking that the Commission for the New Towns did not do its job very well. My problem has been to identify the villains of the piece, which, in many ways, have been the terms of reference under which the CNT was set up. Paragraph 1.6 of its financial memorandum stated that the commission should attain the best price obtainable in the market…The highest bid should normally be accepted. Even though other paragraphs in the financial memorandum instructed the commission not to fragment land, the onus was on maximising financial return. As a result, the commission would fragment land if it was in its financial interest to do so.

Paragraph 2.1 of the financial memorandum stated: The best price will normally be achieved by marketing assets in such a way as to maximise price competition and that delay would be countenanced only if it would achieve "a significantly higher price".

Mr. Mike Hancock (Portsmouth, South)

The hon. Gentleman talked about the Commission for the New Towns. Its major problem was its indifference to consequences. I was heartened by his suggestion that English Heritage, which has assumed responsibility for such matters, might have a different approach. Is he convinced that indifference will not continue? Is he sure that the organisation will be able to resource the effects of 50 years of new town development? Does he believe that the Government will provide sufficient resources to ensure that?

Mr. McWalter

I thank the hon. Gentleman for his observations, although he should have referred to English Partnerships, not English Heritage. He may have made a few enemies, so I want to get him back in those people's good books fairly quickly. He asked whether the manager of the assets of the Commission for the New Towns will adopt a different strategy. If hon. Members were convinced that a different strategy were required, I could almost move on. However, I should dwell on one feature of the commission's operation.

I have mentioned the commission's powers of delay. On my own patch, an extremely important area was required for the building of a 400 m hospital access road. The commission sat on the project for eight years. I was elected on 1 May 1997 and mentioned the subject in my maiden speech, so important was it to me and so dear was it to my heart. Following various meetings with all the interested parties—the health trust, the county council, Uncle Tom Cobleigh and all—and the commission, there would be, perhaps, three and a half weeks of extraordinary activity. I might almost describe it as hyperactivity. The job of a Member of Parliament is to get a train back on the rails when it comes off, and sometimes to give it a shove as well. However, in that case, the moment that the train went out of sight and around the corner, it ground to a complete halt. Four months later, preparation of the various promised documents was no further forward. I see that my hon. Friend the Member for Stevenage is listening to my remarks with some enthusiasm.

Barbara Follett

I echo my hon. Friend's comments. The same thing has happened and is happening in Stevenage, where English Partnerships now holds small but significant pieces of access land, preventing many developments to which it holds the key. In the mid-1980s, Stevenage attempted to wrest control of its destiny from the Commission for the New Towns under a Bill which, I am sorry to say, failed. It would be far better if Stevenage, rather than English Partnerships, controlled its own destiny.

Mr. Mc Walter

My hon. Friend anticipates one of my solutions. A danger of accepting interventions is that other hon. Members may filch one's best lines. Other hon. Members in the Chamber nodded at what she said: the way in which the CNT proceeded, which she described, is of course inappropriate, but it is not completely new. My father used to work on a building site, and sometimes the people on the site would find out that there was likely to be no work in the near future. As the desperate day grew ever closer, the work grew ever slower—until they found out that there would be new work. Then they speeded up and finished off the first work. People will react rationally. I suspect that employees of the Commission for the New Towns were in some areas a little like those people on the building site. If they did their job incredibly quickly, they would have no job left; so they did it rather less quickly.

As I have said, my main concern is that the framework in which the commission worked was invidious. The financial memorandum that describes the framework for its operations considered whether some land might, for instance, be sold to the National Trust. It seems to me that if land is of a suitable character to be sold to the National Trust, it is precious and hence tremendously important to a community. Indeed, the National Trust land at Ashridge Park is precious to the people of my constituency. However, the Commission for the New Towns took the view that a selected purchaser such as the National Trust—which figured as an example in its financial memorandum—should be treated with caution, because of the risk of it not realising full market value. In other words, if something of strong environmental character is retained, lo and behold, that could blow it for realising the money intended to pay wages and honour obligations to the Treasury.

Mr. Bill Rammell (Harlow)

Does my hon. Friend agree that the guidelines that are given to English Partnerships contain at least a theoretical possibility of deviating from maximum return for the Treasury, but that the problem in practice is that the rule of deviating for community gain is not applied consistently?

Mr. McWalter

My chain of argument must be immensely logical, because my hon. Friends are seeing the next step, and hopping in to wrest it from me. As my hon. Friend says, there is potential for a change in methods. I emphasise that there was a conflict between those living in a new town and the old commission. A question arises about the extent to which the CNT's philosophy has been carried through into a new structure.

There are in some respects clear discontinuities, at least of principle. I have become aware of those only since requesting this debate. I was not optimistic about the changes. However, something happened with respect to the hospital access road site that I mentioned, which was so frequently booted into touch, to use a new metaphor, by the Commission for the New Towns. To be fair to English Partnerships, it took the view that it had continued the inefficiencies of the commission with regard to the site, and apologised wholeheartedly for those omissions. I was grateful for the honest approach to my sense of grievance on the matter.

The site for my hospital road, which, ironically, is called "Paradise"—I think that "hell" would have been more appropriate—is needed by the community. Its development would benefit the whole community, but that development must be strongly configured by the needs of the health service. The land adjoins the hospital. Therefore, as my hon. Friend the Member for Harlow (Mr. Rammell) suggested, if there is a discontinuity in policy between the Commission for the New Towns and English Partnerships, a discontinuity in practice is also vital. That discontinuity in practice needs to be consistent, as my hon. Friend said. We cannot continue with a system in which there is a feeling that such decisions are made capriciously. I am therefore pleased that, in my constituency, English Partnerships has broken with the Commission for the New Towns tradition. Because of that, my object in seeking this debate has altered slightly. I should like to tell hon. Members something about that discontinuity, to give them some hope that things may be about to change.

English Partnerships has committed itself to treating the hospital-aspect land over which it has control in terms not of the financial return that it will make to the Treasury, but of the "best consideration" for both the community and the Treasury. Paragraph 69 of the English Partnerships financial memorandum, dated July 1997—the Government lost little time in addressing the matter after the election—requires it, as the successor authority to the Commission for the New Towns, to obtain market value for any asset it sells, assessed in relation to the use proposed for the asset. The paragraph provides a different way in which to think of the role of English Partnerships.

The precedent of taking into account "best consideration" rather than maximised value augurs well. It gives us the opportunity to overcome some of the problems that the communities and representatives of new towns have had with the old structure. The new financial memorandum will not prevent English Partnerships making significant sums for the Exchequer, but it will minimise the conflict between the community and itself by ensuring that it works closely with those in a locality. If English Partnerships emphasises that aspect of its brief, it will set a distance between itself and its predecessor authority. However, we should perhaps give it good notice that, if we get the train going and the authority stops it when it goes around the corner, we shall sack the driver.

When I called for this debate, I was not sure that the authority had the power to dispose of assets at less than the fullest market valuation; I now know that it has, and is prepared to use, that power. Following the "Paradise" decision, if I may call it that, there is clear water between English Partnerships and the Commission for the New Towns. In part that is thanks to the emphasis on urban regeneration in the relationship between English Partnerships and the Department of the Environment, Transport and the Regions, for which my hon. Friend the Parliamentary Secretary of State for the Environment, Transport and the Regions, the Member for Stretford and Urmston (Ms Hughes), will respond in this debate.

I admit that I was prepared to castigate English Partnerships as a successor to the Commission for the New Towns. It seemed to be drawing down the maximum financial return from new town assets. However, there has been a change for the better on my own patch—and I hope in other new town constituencies as well. Members who represent new town areas will be pleased to work through the implications of those changes.

The history of the new towns suggests that the way in which they were set up resulted in little attention to fostering their own local democracy. That echoes the point made by my hon. Friend the Member for Stevenage. In a standard local authority, the land bank was under democratic control, to be used for the public weal. In a new town, however, it was controlled by an authority that was interested only in maximising the financial return it made to central Government. That historical residue and that view of new towns is still with us, because people still think of them as privileged places that have consumed a lot of resources and owe a buck in return. It is important that we address that view of new towns when we consider other aspects in this debate.

My hon. Friend the Member for Crawley said that a threat lay in the wings for new towns. That threat relates to the requirement for councils that are technically in a position called negative subsidy to pool profits from April 2002. Those profits would be redistributed around the nation, which all sounds very technical. I previously secured an Adjournment debate on this subject, so I do not need to add much to what I said then.

It is important to note that the concept of a housing resource, as it is currently defined by the DETR, is deeply invidious for new towns. Most of the resources of new towns originated, in some way, from a housing source. Because housing was the new towns' only resource base, they will be left with nothing if the DETR adopts the historical definition for its concept of a housing resource. There may be odd bits and pieces of land that some vicar donated in the 17th century, but new towns do not have the same asset base as other communities. The DETR must take account of that point in its definition of housing resource. When, in addition, it ring-fences housing by saying that resources cannot be taken out of housing and used elsewhere, it denies new towns the capacity to develop an effective resource to address what I characterised earlier as the deficiencies of the new town blueprint.

That important matter is being articulated not only in this Chamber. For reasons lost in the mists of time, my local authority is called Dacorum; it has something to do with an Anglo-Saxon division of land. On its website, Dacorum council discusses the problems of current Government policy and the financial issues that face the borough council. It states: Senior councillors and officers have been lobbying hard over the summer months to achieve what amounts to an increase in the transition period that central Government will allow before they take all the money. That is what they have been "lobbying hard" for. I have been lobbying harder for something else: for the money not to be swiped at all. The Minister will be aware that I wrote rather passionately to her about that in my submission to a Government paper on the matter.

Dacorum council also says: Meanwhile councillors have agreed proposals to plan savings of £2.25 million from the council's spending. The council spends only £20 million, so £2.25 million is a cut of devastating proportions. The council continues: We are expecting some good news about the amount of time the Council will be given to adjust to the changes which are being made by central government. That reminds me of the story about someone who, on hearing about Nero's fiddling while Rome burned, asked, "What tune was it exactly?" When huge tranches of resources are being lost, it is beside the point to say, "We hope to have good news about the length of time that they will give us." Some people have suggested that cutting perhaps 40 per cent. from a council's budget, as proposed in the overall plan, could reasonably take 30 years—30 years of misery.

Laura Moffatt

Is my hon. Friend aware that Crawley council, for that very reason, faces a 25 per cent. cut in its services to the community? I suspect that that is happening in other new towns, too.

Mr. McWalter

I thank my hon. Friend for that observation. Initially, we examined the repercussions of the ring-fencing of housing resources and thought that it was especially bad for some new towns, but when we examined them further, we found that the new rules captured a greater number of new towns. The Government must consider the issue as a new towns issue.

Barbara Follett

In Stevenage, which is the oldest of the new towns and now well past middle age, most of the housing stock needs repairing. The council is grappling with the problem of having to install new boilers, and for it to have to face a cut now is little short of disastrous.

Mr. McWalter

Those of us who are concerned about the problem initially wondered whether Stevenage had negotiated its way out of it. I am pleased to have my hon. Friend lobbying with me on these issues, although it is distressing to hear that her constituents are also subject to such cuts.

I do not mind if my local council loses money. I should qualify that: I do not mind if it loses money if it is wasting it; if it is not delivering best value; or if it can be shown that cuts will, in the end, provide better value for the resources that hard-pressed council tax payers put into local government services. I believe that the council in my patch would come out very well from a best-value assessment. In some respects, it has a claim to beacon status. For example, it anticipated the Government in setting up an advice centre so that the elderly would be fully aware of their entitlement under the minimum income guarantee. No pensioner lobbyists visited me yesterday, because nearly everybody in my area gets what he or she deserves.

The reality of a 5 per cent. cut in the voluntary sector, which is part of the proposals, is a reduction in resources for the blind, the mentally ill, the bereaved, the mentally handicapped, the homeless and the drug-dependent. Our meals on wheels service alone costs £750,000 to run, and will be dealt a severe blow by the proposals.

I challenge my hon. Friend the Parliamentary Secretary to say in replying to the debate that she will not remove resources from the local authority in my area except on the basis of an appropriate best-value assessment. I believe that such an assessment would leave all those services intact. One might ask what a borough council is doing providing such a wide range of services. The answer is partly that it has been proactive. It is in many ways a beacon council and should be honoured for its work, not savaged.

Barbara Follett

I should like to echo my hon. Friend's sentiments. Stevenage has tried to remedy some of the ills that the design of the new town has inflicted on it. There is strong evidence to suggest that, in new towns, boys are doing far worse than the national average, and we are building up severe problems for the future, when those young men attain adulthood.

In Stevenage, we set up the Raise project to try to motivate young men. That project is funded by the borough council, not by the education authority. We have also done a great deal of community safety work—in fact Stevenage is a beacon council because of that. I echo my hon. Friend in saying that such councils deserve better and deserve more.

Mr. McWalter

I agree with my hon. Friend. It is ironic that the arrangements for governing new towns revealed considerable scepticism on the part of those who constructed them about the ability of local people to get on and deliver a good quality of service to those in their locality. It seems that exactly the opposite has been so. In my local authority, there was also a pioneering community safety partnership, which included the use of closed-circuit television in some of the difficult areas. In a wide range of ways, the local people have shown themselves to be fully capable of utilising resources sensibly.

A Minister responsible for social services visited my constituency, looked at the advisory services for the vulnerable and the elderly and commended them highly. It is peculiar that while one arm of government says, "This is terrific, so many people could learn from this practice", a DETR Minister can say, "I am sorry, but I have some bad news. Resources will have to be chopped away."

Laura Moffatt

I thank my hon. Friend for giving way once more; this will be my last intervention. In the light of the contributions to this important debate, what possible justification does he think there can be for taking money away from new towns and giving it to the Exchequer?

Mr. McWalter

I thank my hon. Friend for her intervention. I am sorry that it will be her last, as her points have been most valuable. It feels as if the idea behind the old Commission for the New Towns persists and that some think, "These people got a lot; it is their turn to start ploughing it all back." Decisions are being taken without looking in detail at how their consequences will be borne.

Mr. Hancock

The hon. Gentleman is being amazingly tolerant and understanding in allowing so many interventions. The hon. Member for Crawley (Laura Moffatt) asked him about the motives behind the pay-back syndrome. Is it a Government-driven, political policy or a Treasury-led initiative? Historically, nobody has been able to budge that problem.

Mr. McWalter

The hon. Gentleman makes a good point. A sensible Government policy has had an unexpected backwash in new towns. When I was a councillor, the council made a profit on its council houses and used it to lower the overall rates. It made bigger profits by refusing to maintain houses properly. I understand where the Government are coming from in that respect, and it is vital that such policies are addressed, but it is very different when a council is delivering the services and policies wanted by those in central Government, when wearing all their other hats.

I must add one other thing. Some local authorities have been managed very successfully, but have not been able to participate in central Government programmes of allocating resources. The local authority on my patch has made no demand on housing improvement programme funds for many years—not because it does not have a housing programme, but simply because it knows that it can generate the resources from within, and manage without going cap in hand to the Treasury.

People must recognise that Government policies are running against each other. That is why, when I first called for the debate, I wanted a reply from a Minister who had a specific role in joining up government. I will be honest; I wanted a Treasury or Cabinet Office Minister, who, theoretically, has that responsibility, so that we could examine the cumulative effects of all the issues, and not simply financing. That is why I use the word "resources" and not "financing". We are talking about land banks, housing assets, assets for leisure and culture, and so forth.

I shall be brief on my final point about the problems facing new towns, though it could be the subject of a further Adjournment debate if we do not receive a satisfactory response. It originates again from the DETR, which is responsible, in my area, for providing resources to Hertfordshire county council through the so-called standard spending assessment. That allocation of resources is related to the expense of hiring people to do a job.

My hon. Friend the Member for Crawley, who I know must leave the debate soon, mentioned the high cost of labour in the south-east, which has repercussions for the problem areas that we identified. The Government have decided not to uprate the standard spending assessment component that relates to the cost of labour, even though it costs much more in the southeast than elsewhere. I find that strange. One DETR Minister to whom I mentioned that point said, "Well, it would cost a lot of money and you are doing very well." If it costs an extra 6 per cent. year on year to hire teachers or porters, for example, that should be regarded as the going rate. Even if that is paid, we are not doing particularly well; we are just keeping a standard level of service, which is what the SSA is supposed to be about.

In Hertfordshire, cuts in next year's SSA could amount to about £7 million. Of that, about £4 million is for education and about £1 million bounces back on to new towns. I do not know the figures for other authorities represented by hon. Members present today, but that area cost adjustment is a further deprivation of resources from new towns. It originates, as I said, from the DETR, and it is important that the DETR takes note of it.

The cumulative picture, which is the result of all the different pressures, is of the erosion of the resource base, so that new towns face problems in addressing the problems of the community. They already have inherited problems and have had to cope with three successive whammies on their financial status. The first relates to the continuing depletion of resources through the aegis of the Commission for the New Towns—now part of English Partnerships; the second is the depletion of resources through the negative subsidy that authorities issue; and the third is depletion as a result of the area cost adjustment.

The result is a structure under which the Government's role in providing resources to people who do a job for our communities is compromised. Local schools, for example, require resources. If the Government, with a blast of trumpets, give £40,000 to a school to solve its problems, but squeeze that resource through technical adjustments to the new earnings survey component of the SSA of the area cost adjustment, we know that the latter policy will never hit the headlines. It is, however, a real issue for people in our localities, and the Government must address it as energetically as possible.

11.54 am

Mr. Bill Rammell (Harlow)

I am aware that time is short, so I shall try to be brief.

I congratulate my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) on putting the case so well. His arguments on a matter of real concern are shared by all hon. Members with new town constituencies.

Most new town communities were built at the same time and are deteriorating at the same rate. New towns have never possessed the land-bank assets of more traditional communities, and the Department of the Environment, Transport and the Regions, and its equivalent Department under previous Governments, has not given that sufficient recognition.

I shall deal with the issues in turn: first, the role of English Partnerships and the Commission for the New Towns, which the new town communities resent, as the organisation is seen as a remote and unaccountable asset-stripper—£162 million a year goes back to the Treasury. My hon. Friend was right to say that the rules allow deviation from those returns to the Treasury, but they are not applied consistently and are not made available to the local community or to local community organisations. Many community organisations that are trying to develop their own facilities, especially for sport, are being given conflicting advice, information, deadlines and time scales by English Partnerships, which is unacceptable. I can best sum up the organisation's remoteness and lack of accountability by recounting what was said when I intervened on a constituent's behalf and contacted an official of English Partnerships about the sale of a piece of land over which it was negotiating with a community organisation. The official, who will have to remain nameless, said, "Well I will talk to you, but you must realise that technically it is none of your business." For a member of English Partnerships to speak in that way to a representative of the local community—I am not getting on my high horse and speaking of myself as an individual—is unacceptable.

I agree, too, with my hon. Friend's argument about the area cost adjustment. There are significant extra costs in the south-east, and we thought that we had a "done deal" when the ACA was put on hold until 2002, but last year's earnings survey was implemented within the ACA, which resulted in a cut for Essex. This year, when the earnings survey shows a rise for Essex, it is suggested that it will not be implemented. That is inconsistent and unreasonable, and might be open to challenge.

The most important issue is that of resource accounting for councils that, technically, are in negative subsidy. My hon. Friend and I have spoken about the matter in the House before and we have had welcome access to Ministers. It is a huge issue and hon. Members have described the impact in their communities. In my local community, £3.1 million being taken out of a general fund annually of £12.6 million means either huge cuts or huge increases in council tax. I do not deviate from the Government's principle that tenants should not, as a rule, subsidise the general fund, but the impact on a handful of local authorities is disproportionate and unjust.

The Government have listened, particularly about phasing, and I welcome that, but I am worried that the impact of the proposals will come in two stages—first, on 1 April next year, which will have a major impact on my local authority and, secondly, on 1 April 2002. The way in which those two stages will be financed differs.

The first stage will be met by the local council's own housing revenue account; the second stage will be met from the national pool. The impact on my local authority is enormous. If it is to take advantage of phasing, the money must come from its housing revenue account and from rent payers in Harlow. As that is the Government's objective, I hope that my hon. Friend will listen to our concerns and ensure consistency so that both stages of phasing are financed similarly through the national pool.

Ministers have listened to us about what is called the item 8 credit transfer. It is the element that takes account of the set-aside capital receipts that were previously used for non-housing purposes. There was an assumed investment income to the housing revenue account, which is the main cause of negative subsidy. We went down that road because we did not have the asset base; the only asset available was the set-aside capital receipts.

The Government have listened, particularly through the local government technical working party, but I am worried that the concession that the Government are considering will apply only when a local authority becomes debt free. The trouble with that historic method of financing is that if we do not allow authorities that become debt free to have that assumed transfer nullified, it will not meet the needs of that small number of local authorities that have a real problem.

Finally, about 100 councils are hit by the negative-subsidy problem. For a handful of local authorities, predominantly new town authorities, the issue is severe. Even at this late stage, I hope that the Minister will go further. I hope that she will ask her ministerial colleagues to reconsider the matter to see what support can be offered.

12.1 pm

Mr. Mike Hancock (Portsmouth, South)

I am grateful to the hon. Member for Hemel Hempstead (Mr. McWalter). I do not question the time that he took to introduce the debate because, logically and understandably, he raised issues that affect hundreds of thousands of people and many local authorities.

If a lesson is to be learned from today's hour-and-ahalf debate, it is that many people and local authorities are begging the Government to think again about that clawback. To take £162 million a year from new towns will deprive them of the opportunity to put into their communities what was not included when they were built. Those councils will not be able to prop up the communities that have aged with the new towns, or to take account of the problems that have resulted. For instance, community centres that were built for young people now no longer attract the youngsters because older people are using them, and the buildings do not adapt to use by varying age groups.

If a lesson is to be learned, surely it is that we must look at what has happened in the past 50 years, particularly in the south-east. We must not allow the new town syndrome to be repeated elsewhere in the same format. As a local councillor, I represented an authority that created two new towns, one of which, Leigh Park in Havant, is the largest council estate in Europe. We simply built houses, one or two schools, the odd pub, one community centre and a shopping parade. We then left it to the community and the small local authority of Havant to pick up that enormous baby. Those 30-odd thousand council houses in Portsmouth were able, for the best part of 20 years, to service many other activities from the housing revenue account. I cannot remember the general rate fund being used to support any activity on those large estates outside the city.

As leader of Hampshire county council, I was responsible for the development of Basingstoke, under which its population increased from 50,000 to more than 125,000, and the Andover development, under which 40,000 people from London moved into a small rural community with homes, schools and very little else. There was no infrastructure. Parliament and the Government need to learn lessons from the examples that have been mentioned today. It is not good enough to continue in the same way.

I am heartened by what two hon. Members said about the Government's new relationship to new towns—the take-over by English Partnerships, as opposed to English Heritage. I hope that that will come to pass; if it does, it will be a more positive, visionary and, perhaps, understanding approach. However, should new towns be run in such a way that the people who make key decisions—on the release of assets, the selling of land and achieving best value—are not part of the community where those decisions will have the greatest effect? There is no financial gain if one does not want to sell land simply because it makes good sense for the community for it not to be sold.

Where is the local authority's ability to resist English Partnerships' demands to sell assets? A mechanism that allows the local authority and the interests of the community to override the new relationship between new towns and English Partnerships is essential. Otherwise, sadly, the problems will persist. As hon. Members have said, some local authorities could lose 10 to 25 per cent. of their spend. Local communities will suffer, because desperately needed replacements and upgrading of property and other assets will not be undertaken. Ultimately, that will cost more money. Some support for the community will be lost, and it will not easily be replaced.

I hark back to what the hon. Member for Hemel Hempstead said about living in a Parker Morris house and the standards that apply to such buildings. I wish that some of the properties that are now being built by housing associations could claim that in 40 years' time they will, perhaps after a little adaptation, still be fit for habitation, as are many Parker Morris houses.

When the developments were built, the people who were going to live there were not trusted. It was as if we as a nation said, "We will create new towns, but we will not trust these people who have been shipped in from cities such as Portsmouth, Southampton and London—we will put in an overseer who will control the way in which the towns develop, grow and resource themselves." That approach has failed miserably, and we must do something about it now, before it is too late.

I am glad to have had the opportunity to play a part in this debate, and I know that many of my colleagues would have liked to be present. I plead with the Minister to respond to the issues that have arisen. If we do not do something now, we will run out of time; resources will go and will be lost for ever.

12.7 pm

Mr. Damian Green (Ashford)

I join other hon. Members in congratulating the hon. Member for Hemel Hempstead (Mr. McWalter) on securing the debate and on his full exposition of the problems.

Annunciators throughout the Palace are displaying the debate title, "New Towns (South-East)", and it struck me that many visitors will think that Parliament is considering building more new towns in the south-east of England. A chill is probably going down many spines at the prospect of such an ill thought out policy.

I had intended to divide my contribution between the details that were discussed by the hon. Member for Hemel Hempstead and other hon. Members and more general issues about development in the south-east. In fact, many of the general points that I wanted to make arise in relation to the problems that the hon. Gentleman explained in introducing the debate.

I was interested to hear the hon. Gentleman say that, although he thinks that the new town concept was good and supports the ideas that lay behind it, current events represent an agenda for decline, and that even if we stick to the concept of what might be called oxymoronically the "old new towns"—or "middle-aged new towns", as they have been described—it is clear that something has gone wrong in the past 50 years.

When the Minister and her colleagues develop policy, on both existing new towns and wider planning issues, they must ask whether that agenda for decline has been a result of human error or whether there was always something systemic that would ensure that, over time, things would go wrong. One can draw conclusions about the undesirability of applying general principles too specifically across areas of the country in which local communities may have widely different needs. Those conclusions should enable the Minister to respond specifically to the points raised about new towns, and give her pause for thought when she considers the wider policies that the Government are proposing, not least in relation to the south-east of England.

The hon. Member for Hemel Hempstead spoke of problems, which are now very apparent, based on the hubristic application of once-fashionable nostrums. He talked about asbestos, school buildings, and so on. I am sure that all hon. Members have arrived at a school in their constituency, taken one look at the roof—knowing within 10 or 15 years when the school was built—and realised that they were about be told that that school had to spend a lot of money on its roof, because of permanent problems with buckets in corridors. That should serve as a warning to Governments not to apply the fashion of the day wholesale, everywhere, especially if some local wisdom suggests that what may appear a good solution 50 miles up the road may not be the best solution there.

The hon. Member for Hemel Hempstead made the point that one of the problems with the new towns, as they were set up, was that they were not planned for organic growth. It seems paradoxical to talk about planning for organic growth, but I think that the hon.

Gentleman meant that not enough flexibility had been built into the system to enable different towns to grow in different ways, and to become different types of towns.

The hon. Member for Stevenage (Barbara Follett) made the point that Stevenage and Hemel Hempstead look as though they come from the same blueprint. They may now be very different communities with different needs, but it is obvious that someone put down a single blueprint and said, "That is what we are going to adopt." That, too, should warn Governments against hubris, because every age has its blueprints and its visionaries who say, "This is the way to develop our towns." Many of them are genuine visionaries who produce a quality of life that did not exist before. However, Governments should be more modest about applying those blueprints.

The hon. Member for Hemel Hempstead made the point that resources are not only about money. He said that he was not just appealing for more money to be given to his area, although I note that, as one would expect, he went on to do so, and that other hon. Members joined in. He said that the assembly and provision of land—and I assume, by extension, the provision of other infrastructure that allows communities to grow successfully—are also vital to the planning process.

The lesson that the Minister and her colleagues could draw is that it is extremely short-sighted to plan for growth in communities simply by using housing numbers, without ensuring a supply of infrastructure before people arrive to live in those houses, and a future flow of the forms of infrastructure that make life tolerable in those communities. That mistake has clearly been made in the past, for which communities around the edge of London are now paying the price. Please, let us not repeat those mistakes. I am afraid that the Government seem determined to do so, judging by their current policies for the south-east.

The central question asked by the hon. Member for Hemel Hempstead was who are the villains of the piece? Why are things going wrong in the various new towns? He made a good point when he said that, in some ways, the problem lies with the Commission for the New Towns' original terms of reference and their somewhat mechanical application. One cannot blame the commission for that. One should not condemn public officials for fulfilling terms of reference laid down by Parliament: if the terms of reference are wrong, that is the fault of Parliament and the Government.

However, I accept that, if a blueprint is established on a national or regional basis, the communities that are subject to those terms of reference are likely to suffer. The hon. Member for Stevenage said that her constituency has tried to grab back some power, so that local people can take the decisions that they regard as appropriate to their own community. I support that idea entirely, and it is certainly the way ahead. In the past, we have centralised too much, and we should try to reverse that process.

Another lesson that I hope the Minister will learn concerns the role of the regional development agencies. It has been fascinating to listen to hon. Members—mainly Labour Members—complain that problems in their constituencies are the result of power being taken away from, or not given to, councils, and given instead to relatively unaccountable and distant public bodies, whose agenda may differ from that of local people.

Mr. Rammell

Will the hon. Gentleman acknowledge that those problems are long-standing, and that at least we now have a Government who are listening? I spent 12 years as a councillor in a new town authority, and during that time the then Government simply did not listen.

Mr. Green

The hon. Gentleman says that the Government are listening, but my point is that, in the past two or three years, they have been in the throes of setting up RDAs, which will be remote from most communities. RDAs will have extensive powers; they are already able to take decisions that should properly be taken by local councils. Those wretched institutions will not survive beyond the next general election, but were they to do so, the hon. Gentleman's and my successors would ask why those institutions were given such powers. They would ask why decisions taken by distant, remote and relatively unaccountable bodies had led to money being taken away from their local communities, or to the imposition of the wrong type of development.

One need not look into a crystal ball. The same wave of goodwill and good intent that accompanied the setting up of the RDAs also accompanied the creation of the Commission for the New Towns. As the hon. Member for Hemel Hempstead said, the commission seems to have introduced an agenda for decline. Moreover, its decisions—now under English Partnerships—are arbitrary and unfair.

As the hon. Member for Harlow (Mr. Rammell) pointed out, many who work for the commission display an intrinsic arrogance. They do not regard as legitimate the intervention of local representatives—be they hon. Members or councillors—in decisions that, in their view, properly belong to them. Were the RDAs to have a long-term existence, I am certain that that is how they would develop. Hon. Members and, above all, local authorities would discover that a bad decision had been taken in terms of planning, which should be responsive to local needs, and the preservation of proper local democracy and representation. I urge the Minister to take that lesson from our debate and the problems that it has revealed in new towns. Policies are being implemented that will replicate many of the problems that arose because of the way in which new towns were set up.

The thread that runs through our debate is the need for local sensitivity, and the Government would do well to take account of that. They should not continue in a direction that is fundamentally centralising but should devolve power to local authorities and communities.

12.20 pm

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Beverley Hughes)

I congratulate my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) on securing the debate. He and other hon. Members have raised many important points in excellent speeches. Notwithstanding the fact that the debate has raised serious issues, it has been good-humoured and illuminating. I pay tribute to the assiduous way in which my hon. Friend pursued the benefit for his town, as have other hon. Members. My hon. Friend is a veritable terrier; I hope that he will take that as the compliment that is intended.

My hon. Friend started by analysing the issues facing new towns, including the ageing population and infrastructure, and specific problems concerning school buildings. The hon. Member for Ashford (Mr. Green) asked whether there are systemic problems peculiar to new towns or whether their problems are more general. He failed to see the obvious answer, which I shall give and to which my hon. Friend the Member for Harlow (Mr. Rammell) referred. Many of the problems facing new towns, although they had a specific genesis and period of development, undoubtedly stem from 20 years' neglect of infrastructure, development and opportunity, and local government's inability to have an impact on the issues. New towns share some of the problems faced by inner cities, market towns and coastal towns following a lack of investment, and I am glad that my hon. Friend the Member for Hemel Hempstead acknowledged the extent to which that is starting to change under the present Government, with the additional resources that we are directing into a variety of places.

It is unfortunate that the hon. Member for Ashford tried to hijack this important debate for party political purposes when all other hon. Members in this Chamber were trying to speak with one voice across party boundaries about the issues facing their towns. It is a bit rich for him to criticise the Government for establishing regional development agencies when the establishment of the worst sort of quango, with no local government representation, was a hallmark of the previous Government's record.

My hon. Friends referred to some important matters and I shall try to do them justice. They referred to English Partnerships and the Commission for the New Towns, the changes to housing finance and the area cost adjustments.

I am aware of the frustration, which my hon. Friends graphically described and which was audible from the passion in their voices, arising from the legacy of the Commission for the New Towns. The description of the commission operating as a resource-abstraction mechanism since Domesday may be a triumph of passion over accuracy, but it shows the strong feelings that have been generated.

Since coming into government we have tried to bring together, under the umbrella of English Partnerships, the Urban Regeneration Agency and the Commission for the New Towns. That is never easy. We have not been able to find the legislative time to make them one entity legally, so financially they have to operate as two entities. However, by bringing them together we have tried to change the culture that has been operating. Many important historic issues are involved relating to how the land that the CNT controls was assembled and where the resources for it came from, as my hon. Friend the Member for Hemel Hempstead said.

Notwithstanding memorandum and legal requirements, much depends on the political context in which those bodies operate. I am grateful that my hon. Friend the Member for Hemel Hempstead has acknowledged that he has seen a shift over the past couple of years under EP and because of a different political climate in—

Mr. Deputy Speaker (Mr. John McWilliam)

Order. I do not want to interrupt the hon. Lady, as time is short, but if she speaks toward the microphone the Hansard transcribers will be able to hear her.

Ms Hughes

Thank you, Mr. Deputy Speaker.

We have introduced new draft financial memorandums to deal with some of the issues that hon. Members have raised, especially those relating to less than best price and to openness, accountability and partnership with local authorities. Land has always had to be sold for the highest price, although under the previous Government there was an aggressive drive and requirement for the bodies involved to achieve that. We have tried to change that culture, and I am pleased that my hon. Friends recognise that that is starting to happen.

One initiative that will help is the English Partnerships initiative for town strategies, which I hope will deal with some of the points made by my hon. Friends the Members for Harlow, for Stevenage (Barbara Follett) and for Hemel Hempstead. In that initiative, EP will reconsider how its remaining land assets can be used by forming strategies in partnership with local authorities, which relates to the point made by the hon. Member for Portsmouth, South (Mr. Hancock). I am pleased that local authorities, including Dacorum, which recently met English Partnerships to start developing a town strategy, will be able to take that forward.

The process is beginning, and I hope that my hon. Friends will recognise that it involves a change of culture. We recognise that land assets need to be used for the benefit of the community and are trying to reinforce that politically. The new town strategy initiative is an important vehicle for doing so. For all sorts of historical and legal reasons, land cannot be transferred, but I accept the argument that such assets should be used in pursuit of benefits to the community.

Hon. Members also mentioned the major repairs allowance and negative subsidy, an issue on which two substantial debates have been held, in one of which I replied to my hon. Friend the Member for Harlow. I know that my hon. Friends accept the basic starting point that it is wrong for council tenants to cross-subsidise general services and that subsidies for housing are a national resource that must be used to meet housing need nationally where need is greatest.

It is slightly unusual to feel that I am defending a policy that many people would consider good news. The extent of the major repairs allowance that councils will receive to offset the subsidy is significant for all the councils represented by hon. Members present.

I appreciate that the transitional measures are critical, and on behalf of hon. Members present I shall take back to my hon. Friend the Minister for Housing and Planning the view that has been expressed that special circumstances apply in the case of a few new towns. Decisions are about to be taken; they are not yet final.

The final point that was raised related to the area cost adjustment. Hon. Members are aware that the information resulting from the new earnings survey would, if applied straightforwardly, result in a major redistribution of resources across different sorts of authority. As such a redistribution would be significant, and as we have promised stability, we consulted local authorities. No decision on the matter has yet been finalised, and we are considering several options, including whether the data will be applied and how the distribution might be made less dramatically different. We shall announce a decision shortly, having had a lot of feedback from local authorities.

I remind hon. Members that no authority will face a cut in its revenue support grant for this year. The spending review 2000 gave a generous overall settlement of approximately 5 per cent. Hertfordshire and other authorities in areas represented in this Chamber will receive substantial budget increases. Given the experiences of those councils up to 1997 and the money that they have received in real terms during the first three years of the present Government, those increases demonstrate clearly our commitment to increasing the resources of local councils, to deal with the precise issue that they raise: improving services for local people.

Mr. Deputy Speaker

Order. I ask hon. Members who do not wish to remain for the next debate to leave quickly and quietly.