Housing (Hansard, 16 December 1991)

§ Mr. Heseltine

I am today making a number of dispositions for the use of housing resources in 1992–93.

First, gross expenditure by the Housing Corporation will be £1,770 million, rising to £2,004 million in 1993–94 and £2,052 million in 1994–95. A total of 50,900 new homes will be approved next year, 25 per cent. more than this year, three times higher than in 1990–91. I now expect that completions next year will be 60 per cent. higher—at 43,000—than this year; this is an increase of 24 per cent. on previously published projections.

The corporation expects a very much higher output than previously projected, partly because of falling construction costs and property prices, but also because of increases in the more cost-effective elements of the programme. Next year's rented programme is expected to attract double the amount of private finance secured in 1991–92.

At least 27,000 of the newly approved units will be targeted to benefit the homeless. These remain our most urgent priority.

Next year, the corporation will be introducing a major new programme of "do-it-yourself" shared ownership of which 80 per cent. will be targeted on existing local authority and housing association tenants. Its move into home ownership will release rented accommodation for immediate use in housing the homeless.

As previously made clear, from 1992–93 resources for the corporation's new rented and housing for sale programmes will be allocated among the corporation's 60W regions using the housing needs indicator, without "damping" to reflect past shares. This will direct resources where they are most needed. Even with the removal of damping, all regions will gain compared with 1991–92, most substantially. Details of the programme are being published in the corporation's News Supplement Series, copies of which are being placed in the Library.

Today I am informing local housing authorities of their housing investment programme allocations for 1992–93, some £1.7 billion in total. A total of £1,300 million of these resources are general-purpose allocations, or "annual capital guidelines". In October I confirmed to local authorities that 40 per cent. of these would be distributed on the basis of a statistical assessment of local housing needs, but this year, for the first time, authorities have competed for shares of 60 per cent. of the resources, with the Department assessing their performance and the quality of their proposals. My regional offices have scrutinised authorities' strategy statements and bids, against known criteria, meetings were held with authorities, and Ministers have reached decisions in the light of controllers' advice.

We were particularly impressed by the resourcefulness and quality of some 50 authorities which were well ahead of the field in pursuing effective policies. However, 25—about 79 per cent.—were disappointingly poor and fell far short of the standards their tenants and other people locally have the right to expect. I am placing a list in the Library of the names of the authorities in each region who comprise these groups.

In reaching our final decisions we also took into account other relevant factors such as specific problems or needs and allowed for commitments, and for peaks and troughs in expenditure. For up to 31 authorities these discretionary awards were topped up to honour assurances we had given a year ago as to the minimum allocations they should expect. Some of the more disappointing authorities have been saved, by this topping up, from the full rigours of the new performance assessment. Nonetheless, for about 90 per cent. of authorities the proposed allocations were greater than the minimum level we were committed to. For 90 per cent. therefore, the size of the allocation was directly affected by the performance assessment and the exercise of discretion.

The Department's regional controllers will today be telling councils the broad assessments made and will offer follow-up meetings to discuss, where appropriate, the aspects of performance where improvements could be made.

A further £400 million has been allocated to private sector renewal, in the form of "specified capital grants", to assist councils in their grant aid to private owners and in their expenditure on renewal areas, etc. Forty per cent. was allocated by statistical assessment of renewal needs; 60 per cent. was distributed mainly on the basis of authorities' spending patterns.

I am depositing tables in the Library showing the 1992–93 allocation to each authority of the annual capital guideline and of specified capital grant. Together these comprise the housing investment programme allocations.

I am also reviewing the scope for my Department's regional offices, which already advise me on these HIP allocations, to play a greater role in allocating other DOE resources to local authorities, on a more corporate basis.

Substantially increased resources are given for estate action. A total of £364 million is available, an increase of 61W over one third—£96 million—on the £268 million made available this year. This demonstrates our commitment to the most rundown estates and confirms the strategy announced last July by my hon. Friend the Minister for Housing and Planning.

Almost £160 million is available for distribution to new schemes, of which £115 million will be set aside to start or speed up large-scale regeneration schemes next year. The remainder will support traditional small and medium-sized estate action schemes.

I am, therefore, today inviting over 25 authorities to proceed with 32 large regeneration schemes and 80 authorities to work up a further 100 small and medium-sized schemes for approval. These schemes will involve over £900 million of public and private investment over the next few years. The names of successful authorities and schemes are set out in tables placed in the Library.

Before I give final approval to any scheme I shall expect the local authority to demonstrate that its proposals accord with published guidelines, particularly with regard to housing management and the diversification of tenure and that they have been developed in consultation with tenants, the local community and the private sector.

I have also provided for a major expansion of the programme of housing action trusts. A total of £215 million has been set aside for spending on HATs over the next three years, sufficient for the established HATs in North Hull and Waltham Forest, and for further HATs in four new areas.

Preliminary discussions have taken place with authorities interested in pursuing the HAT option in Liverpool, Brent, Birmingham and Tower Hamlets. I am now satisfied that these should go to the next stage.

As in Hull and Waltham Forest, the projects should be a co-operation between tenants, the local authority and central Government. Some of the feasibility studies are well advanced. Subject to the outcome of these, and after full consultation with tenants, there will be formal ballots of tenants in these areas. If tenants vote in favour, the House will be asked to approve orders establishing the trusts.

As to the current expenditure, I have today issued the housing revenue account subsidy determinations for 1992–93. I am placing copies of the determinations in the Library.

On subsidy allowances for management and maintenance, I confirm the proposals to increase allowances by 6.5 per cent. overall and to distribute the increase by a new system of targeted allowances reflecting the problems faced by different authorities. As a result about £93 million more will be directed to authorities with the greatest need. This is in addition to a general 3.5 per cent. increase in allowances which all authorities will receive.

For rent guidelines, I am confirming the proposal for an average rent increase of 9.5 per cent. This will result in an average increase of guidelines of £2.44 a week over the guideline rents which apply this year with a range of between £1.20 and £4.50 in individual councils. Responsibility for setting actual rents however remains with individual local authorities. Housing benefit will normally meet the whole of any rent increase for the two thirds of tenants receiving it.

These various allocations continue the redirection of resources towards the housing association movement and further develop our measures to help the most neglected 62W council estates. They give a fresh impetus to local authorities to work closely with the private sector, to involve their tenants, and to strive continually for the highest standards of management.