§ Motion made, and Question proposed, That this House do now adourn—[Mr. Newton.]3.30 am
§ Mr. David Winnick (Walsall, North)
I am raising this subject at this late hour because of a deep concern that is felt locally, and certainly by me, about Walsall's housing problems. I raise the matter because there is developing a housing crisis in the borough. No new contracts for council house building have been entered into by the local authority for the last two years. This is against the background of well over 9,000 on the council waiting list, which includes transfers.
I recently received a parliamentary written reply which stated that only one local authority housing start had taken place in the borough during 1980–81. There will be no housing starts at all during the current financial year. In its housing investment application for 1981–82, the council stated that it needed to provide 1,000 new dwellings annually to supply the accommodation needed and to keep up with demand. The figure now would be something in the region of 1,500. The Minister will know that for two successive years the council's housing investment programme application has been cut severely. That is why the council cannot carry out its proper functions as a housing authority.
In the housing investment programme that the council submitted in 1980–81 the figure was £22 million. The allocation received was £13 million. In the following year, 1981–82, the submission made by the local authority in its housing investment programme was for £20 million. That was reduced to £7½ million, a cut of two-thirds.
I must stress that it is not house building alone that is affected by the Government's cutbacks in housing expenditure. There are in my borough 5,700 older council properties. These are properties mainly built in the 1920s and 1930s. There is no disagreement that they are the properties that should be modernised, and quite a number of them have been, as is the case elsewhere. The council would like to be able to improve these properties to bring them up to present-day standards and provide amenities for the tenants. The council would like to complete the modernisation of these older properties by 1984–85. However, because of the way in which the housing investment programme in the past two years has been cut, it has been possible to start modernising in the current financial year only 118 of these properties.
It is understandable that the tenants of these older council properties, some of them my constituents, pay the rent increases with reluctance. The latest rent increase in the borough—as it is nationally—is the one recommended and virtually imposed by the Government of more than £3 a week. When the tenants come to see me about the state of their properties, they say "We are paying this rent increase of more than £3 a week, but when will our houses be modernised, and how much longer will it be before the properties in which we live can have the standards of present-day council accommodation?" That is a very good question, but it is not a matter that the council can resolve. It does not have the funds to do so.
The number of empty properties in the borough is lower than the average elsewhere, and every effort is made by the council to reduce it. As there are elsewhere, there are the difficult-to-let and more unattractive types of dwelling.
1342 But, in case the Minister intends to dwell on the subject, I should point out that some of the empty properties are being used for decanting or for homeless emergencies. Perhaps the point should also be made that some of the properties are empty because of the lack of money to improve them for letting purposes. Some repair and maintenance housing work is also being held up because of the cut back in the last two years in the housing investment programme. There is other work such as rewiring and reroofing which the council is not able to carry out.
It is also not possible for the council in present circumstances to provide many improvement grants to home owners. Again, that is a reflection of the housing problem to which I am referring. The Walsall council would also like to be able to spend some money on improving the attractiveness of a number of older council estates.
With a waiting list of more than 9,000, it is understandable that the housing department is under mounting pressure from a number of the people waiting to be housed. Between 65 and 70 per cent. of the letters that I receive from constituents and of the complaints of the people who see me at my surgeries concern housing matters. Some want transfers. They live with children in high-rise accommodation and perhaps have done so for a good number of years. They want transfers to houses with gardens or to ground floor flat accommodation. There are young married couples in the borough who are not in a position to buy their own homes. They cannot get mortgages; they have not the means. They rely on the local authority to provide them with accommodation. Such young couples, sometimes with children, are living with their in-laws or parents, or living in digs. They want to be able to resolve their housing problem, and the only way will be if they can be offered accommodation by the local authority.
I am really asking that the council should be allowed to carry out its proper housing responsibilities. At the moment, it is not in a position to do so, because it cannot build. There are no new contracts being entered into. It cannot modernise more than a handful of properties. Some maintenance and repair work cannot be carried out. It is a borough where it has been recognised for some time that there is a serious housing problem. It was designated as a housing stress area. I hope that I shall not be told that the council can use funds from other services to supplement the housing investment programme, because that simply is not possible. There is no money from other services that could be used for the purpose.
The council, like other local authorities, is now submitting its housing investment programme for 1982–83. It does so in the belief—I hope without t justification—that instead of providing the allocation that is needed, there will be yet another cutback for the next financial year. We have already had two severe cutbacks. I hope that there will not be another cutback in 1982–83.
About 15 or 16 months ago, I invited one of the Minister's colleagues in the Department to see the housing and environmental problems that we face in our borough. It was in March 1981. The Minister came, and we took him on a coach trip around the borough. He said that he recognised the formidable housing and environmental problems that were facing Walsall council. It is all very 1343 well to say that one recognises the problems, but will the council be given the means to deal with those problems and carry out its housing functions and responsibilities?
I do not raise this matter simply to ventilate a constituency problem. I should not have done so had I not been convinced, first, that there is a serious housing problem in the borough in that the council cannot carry out its housing functions properly and, secondly, that the responsibility lies with the Government, in that proper allocation is being withheld from the local authority.
I hope that the local authority's submission for 1982–83 will be treated in a different manner from its two previous applications. The Government's policy is to encourage the selling of council houses. I have said before, and perhaps I shall be forgiven for saying again, that I only wish that the Government would show as much concern about seeing that local authorities build and provide accommodation as about selling off council houses. Tenants in high-rise blocks of flats, particularly mothers living perhaps on the ninth or twelfth floor, will have to wait longer for a transfer when houses are sold off. However, that is the present Government's policy, and it has been approved by Parliament. So be it.
However, I hope that the Government and the Ministers concerned will understand the housing problems in my borough and, instead of denying the council the opportunity to get on with its job, provide it with the funds and the means to do so. That is why I have raised the matter today.
§ The Under-Secretary of State for the Environment (Mr. Giles Shaw)
The hon. Member for Walsall, North (Mr. Winnick) has drawn attention to the housing problems currently facing Walsall. He would be the first to say that Walsall is not the only authority facing such problems. He rightly said that it is a matter of the overall policy of the Government, against which his borough is having to view its domestic problems.
The Government's position starts on the question of public expenditure. Our guidelines for future expenditure in the housing area have been published and they reflect the Government's judgment of what the nation can afford to devote to housing, having regard to the totality of the national resources available and our assessment of housing needs. The Government have said firmly, and I repeat, that we are totally committed to improving the standard of public services, and that includes housing. But that can be achieved only with a strong economy, and over the years public spending has been planned on assumptions about economic growth that have not been achieved. It has been at a level that the economy of this country cannot support.
If we are to improve the standards of housing, as the hon. Gentleman wishes, and any other service, our first task must be to increase the country's resources through higher output. We have made some progress towards that. It is abundantly clear that the public money available for capital spending will remain very tight. In his speech to the Institute of Housing at Brighton on 26 June, my hon. Friend the Minister for Housing and Construction explained in depth the crucial significance that capital receipts have assumed in enhancing allocations. I consider that advice to be important.
1344 So fundamental is the availability or otherwise of capital receipts to an authority's housing programme that it is essential that that should be reflected in the regular proceedings of housing committees, which should receive at regular intervals reports from the council's finance director on the authority's overall capital receipts position. That is the key financial information that every housing committee should have at its fingertips. It is essential that every council pursues a positive and active policy to generate the maximum possible capital receipts—chiefly from the sale of land and council houses.
In the case of the first of those, I understand that a start has already been made by Walsall and that in 1980–81 1.08 hectares of land were disposed of for private development. Furthermore, I am told that the publication of its land register should not now be long delayed. That information, recording all vacant land in the authority's ownership, should greatly assist the council in its assessment of the worth of its land holdings for potential capital receipt purposes.
One of the major sources of capital receipts is, of course, from the sale of council houses. I am aware that the council had been selling houses before the advent of the Housing Act 1980. I do not wish to dwell tonight upon the council's response to the right-to-buy provisions of that Act, which has been the subject of much correspondence with my Department. Suffice it to say that the council's lack of progress has been a source of grave concern to my hon. Friend the Minister and has undoubtedly deprived it of a source of funding which, from the hon. Member's remarks, appears to be desperately needed.
I have already referred to the changes now taking place in housing policy priorities. Authorities right across the country have found that the maintenance and modernisation of their existing stock has been assuming as great a priority as new-building. The hon. Gentleman referred to the importance of modernising the older pre-war stock. In many cases that is probably more important than new building.
Substantial funds have been channelled into much-needed renovation of older dwellings, thereby competing for funds formerly available for other activities. The national trend is mirrored in Walsall where, during the past few years, more than 1,000 dwellings per annum have been improved and where expenditure in that area has more than doubled.
It follows that funds available for new house building within the public sector are diminishing, but that does not mean that those awaiting homes must necessarily be disappointed. On the contrary, many authorities have found among their existing tenants and those on their waiting lists an increasing desire to become owneroccupiers—people who are both willing and able to buy new or old dwellings, rather than rent, if the opportunity to buy at a sufficiently low cost is made available to them.
I understand that Walsall already has experience of building for sale and the response to its recent improvement for sale venture provided results that were both surprising and gratifying. I understand that for the three dwellings improved with the funds made available for that purpose during the latter part of 1980–81, they were over-subscribed 10 times. Those dwellings were sold at a cost of about £13,000 each—well within the grasp of many first-time buyers. It is to be hoped that, heartened by that exercise, the council will give further consideration to that worthwhile initiative. There are other low-cost 1345 home ownership initiatives which the Department has recommended to authorities for their consideration such as equity-sharing and homesteading schemes and the use of mortage guarantee powers. A skilful authority can satisfy the desire of some of its inhabitants for a home of their own while conserving limited resources to cater for those special needs that are unlikely to be met by the private sector.
I turn to two specific matters that were raised by the hon. Gentleman. The first is housing allocations. The regional allocation for 1980–81 was £217 million, of which Walsall's share was £12.9 million, representing 6 per cent. of the money available for the region. The first call against that allocation was the £1.487 million overspend from 1979–80, which was brought about by the high level of committed expenditure. Over £10 million worth was carried forward from earlier programmes of new construction. Thus, despite the constraints on expenditure for the second half of the year imposed by the moratorium announced in October 1980, which was the basis of the hon. Gentleman's comments, Walsall still managed to achieve an overspend of over £1½ million. This is inevitably reflected in the allocation for 1981–82.
The regional allocation for 1981–82 was £164 million, which represented a 24 per cent. reduction on the previous year's allocation. Walsall's share, which was notified to it in December 1980, was about £9 million. That represents 6 per cent. and it was the fourth largest allocation in the region. It was foreshadowed when allocations were notified by the announcement that adjustments would have to be made later this year to take account of the estimated outturn for 1980–81. The first of these adjustments took place in March, when Walsall had estimated its overspend for 1980–81 at £1.217 million. To reflect that overspend, the 1981–82 allocation was accordingly reduced by this amount to a net permitted spend of £7.876 million. The second adjustment to take account of the council's most recent estimate of outturn for 1980–81 has recently been notified to the council. As was perhaps expected, the latest estimated outturn for 1980–81 showed a further overspend of £419,000 over and above the £1.217 million originally forecast. There has, therefore, been a further reduction in the 1981–82 allocation of £7.457 million.
Unfortunately, this is the penalty that councils must pay for failing to contain their expenditure within the limits prescribed, or when it is known that there will be overspend, for failing to plan for the contingency by seeking to enhance the allocation by a more enterprising fiscal policy Cy exercising skill in generating capital receipts.
§ Mr. Winnick
I understand that the Minister has a prepared brief. However, I hope that in the time that is available to us tie will be able to deal with the fact that no new housing contract has been entered into for house building by the local authority for the past two years. The Minister approves of modernisation, but this year the borough could undertake the modernisation of only 118 properties. As for capital receipts, the Department has stated that it would take the sale of about 13 dwellings to gain sufficient funds to build one dwelling.
§ Mr. Shaw
I appreciate the latter part of the hon. Gentleman's intervention. I am not saying that there is a one-to-one relationship. I am suggesting that many 1346 councils have found it both desirable and necessary to embark upon the sale of land or council housing to be able to sustain their priority programmes. They have the right to choose, and there is now legislation that allows for the right to buy.
The moratorium had a major impact on the level of public sector starts throughout the country. The financial constraints proved to be well justified in respect of Walsall. Despite the moratorium, Walsall still managed to achieve an overspend of £1½ million. The pattern of starts in Walsall in recent years demonstrates that a critical period had been reached in cash flow. During the five years from 1975–76 to 1980–81 Walsall was involved in schemes to build 3,228 new dwellings. During the same period it reported 3,547 completions.
With such a high level of activity, a reduction in 1980–81 was inevitable with the national trend. That was the result of the previous Administrations's housing policy of making new building for local authorities so expensive that year by year authorities of both political complexions had to reduce their programmes. The hon. Gentleman is right that in consequence only one start was reported in 1980–81, although in the same period completions numbered 562 dwellings. The average new-build starts and completions during the period since 1975–76 has been 538 and 685 respectively. At the same time, the council nearly doubled its expenditure on the improvement of its existing stock. Therefore, with the pressure from existing new-build commitments and the need to pursue a vigorous improvement policy, the opportunity of entering into more new starts in 1980–81 was not available. That view is reinforced by the outturn figure for 1980–81.
On the facts so far presented, the picture is not entirely gloomy. Opportunities exist for the future. It is for the council to take advantage of numerous initiatives that the Government have made available, thus enabling it to meet the changes which lie ahead. I cannot leave the subject of new housing without stressing the extra responsibility which rests with the local authority in specialist-type dwellings. Housing needs and problems are now increasingly specific and local. Therefore, the emphasis of public sector policy must be to meet the specific needs of the elderly and the handicapped.
The hon. Member raised the question of council house rents. My hon. Friend has already explained in an answer on 20 March this year to the hon. Gentleman that the setting of council house rent levels is the responsibility of each local authority. My right hon. Friend the Secretary of State does not, and cannot, lay down what increase must be made in each area. Naturally, however, authorities reach their decisions in the light of his annual determination about housing subsidy and of his assumptions about future rent increases generally. Thus, for 1981–82 my right hon. Friend looked to an average rent increase of £3.25. I note, as no doubt the hon. Member does, that Walsall chose to raise its rents by that amount near the beginning of April.
The hon. Gentleman again questioned this evening the basis for these assumptions when it comes to rent increases. He has done so not only in a parliamentary question but in the discussions of the Select Committee on the Environment, of which he was a member,, and where he had the opportunity to question the Secretary of State direct on this matter.
I would respond to him with the two points which emerged from the answer given to him by my hon. Friend 1347 the Minister for Housing and Construction on 3 July. First, it is mistaken to look at our expectations for this year in isolation, whether in money or percentage terms. They cannot sensibly be divorced from the pattern over previous years. Those years saw, under the last Labour Government, a marked decline in rents compared with earnings.
Secondly, rent increases charged are not necessarily the same as increases which tenants themselves have to meet. Over 45 per cent. of tenants receive assistance with their rent. Those on rent rebates generally have 60 per cent. of any increase met. Tenants on supplementary benefit generally have the whole of any increase met. No doubt Walsall was aware of these facts when it set its increase in April, just as my right hon. Friend was when making public his expectations about rent increases generally this 1348 year. Therefore, I understand that the rent problem featured significantly in what the hon. Gentleman said, but it is not entirely a matter of having to take it in the way in which he put it.
Despite the necessity for tight control of local authority expenditure on housing, there is still much that can be done by each individual authority to enable it to continue to meet the needs of all those who live within its boundaries. The authorities can generate capital receipts to increase the amount of money available to them, and they can explore the various methods now open to them to provide homes, other than for renting, for those who would welcome them, leaving them free as housing authorities to concentrate on those in their areas with special needs.
§ Question put and agreed to.
§ Adjourned accordingly at two minutes to Four o'clock am.