§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]2.37 pm
§ Mr. Ron Leighton (Newham, North-East)
This Christmas will be a nightmare for hundreds of Newham people. While others gather around the hearth in the warmth of their homes, surrounded by the good cheer of the festive season, the hundreds of homeless people in Newham will endure a nerve-wracking time in miserable, unhygienic and often dangerous bed and breakfast accommodation. Government policy has led to a frightening and rapidly deepening crisis in the borough. If the Minister visits Newham, the housing conditions he will see will turn his stomach. It must concern everyone, including the Government. That is why I want to bring Newham's position to the attention of Parliament today.
Our housing stock is in a worse condition than that of any other London borough. The number of unsatisfactory dwellings—unfit, lacking basic amenities and in need of substantial repairs—is 46,923. That is higher than in any other London borough. Most of Newham's housing, 58 per cent., is in the private sector and most was built before the first world war. While the proportion of private properties which are unfit in London as a whole fell from 10 per cent. to 6 per cent. between 1979 and 1985, in Newham during the same period the proportion actually increased from 21 per cent. to 36 per cent. The Minister should readily recognise from that that Newham is different and that it is a special case where it is the Government's urgent duty to take action before there is a disaster. The shortage of dwellings is severe. I have been shocked and appalled by the horrifying increase in homelessness which is now an acute cause of pain and suffering and hangs like a pall of misery over hundreds of my constituents this Christmas.
Because the Government have not allowed councils to build more homes but have forced them to sell homes instead, often to people for whom private builders would have found it profitable to build houses, the inevitable has happened—homelessness has risen dramatically. Homelessness is worse in London than in the rest of the country, but it has grown faster in Newham than in the rest of London. Between 1981–82 and 1984–85, the number of households accepted as priority need homeless in London rose by 42 per cent., but over the same period the figure for Newham rocketed 128 per cent. Again the Minister will see that Newham has special needs and requires special treatment.
In 1985–86, of the 1,400 dwellings let by Newham council, excluding transfers between tenants, 810 or 58 per cent. went to priority need homeless. In the current year, the increase in homelessness has been so dramatic that projections based on the first six months, from April to September, show that homeless cases will take 1,100 dwellings or 79 per cent. of the total. Housing the homeless is rapidly reaching the stage at which it is taking up all available council house lettings so that there is no room for rehousing from the waiting list of more than 11,000 people. Indeed, "waiting list" is now an inaccurate description as most of those people will never be housed by the council however long they wait. Does the Minister appreciate the heartache and misery that that causes and that is brought to me whenever I hold a surgery?
1256 The Government must take the major share of the blame for the crisis. Housing has borne the biggest and deepest cuts in public expenditure and this has been the result. Newham's housing investment programme allocation has been more than halved in real terms since the Government took office—from nearly £45 million in 1979–80 to £21.7 million in the current year. This has resulted in severe reductions in the building of new homes and in repairs and renovation of existing homes. If new building had been allowed to continue at the average completion rate achieved under the Labour Government between 1974 and 1979, Newham would have completed more than 2,000 additional new homes between 1979 and the end of the current financial year.
Our housing is the worst in London and, as more and more of it falls below acceptable standards, the pressure for decent housing increases while the level of council stock falls. The Government repeatedly talk about the right to buy, but this adds not one house to the housing stock. By reducing the number of houses for rent, it exacerbates the problem. As of 31 October 1986, 3,365 council homes had been lost to the public sector in Newham through the right to buy. Council homes are being sold at a rate of 400 a year—far more than the borough's limited resources allow it to build to replace them. Inevitably, they have been the better quality houses, leaving only the older stock for people dependent on the council for rehousing, so the quality as well as the quantity of homes available for the homeless is being reduced.
Another specific problem of the public sector in Newham is the 108 tower blocks of more than eight storeys. Many of those blocks are reaching an age at which their services, particularly their heating and lifts, must be renewed. Service renewal and remedial works constitute a major capital expenditure which amounted to some 15 per cent. of Newham's HIP allocation last year and is predicted to rise to some 25 per cent. this year. Perhaps the most poignant of Newham's special problems is the tragic, ill-fated Ronan Point, of which the Minister will know, and eight similar blocks. All those blocks have had to be emptied because they are unsafe. Even if it were possible to bring them back into use, it would cost some £65 million—far in excess of Newham's resources. A further three tower blocks are now being emptied. The findings in the dismantling of Ronan Point fully justify that, but it has led to the loss of 1,338 dwellings. The rehousing of those tenants, plus the loss of relets and rents from those blocks, has resulted in a dramatic worsening of Newham's housing plight. The Government must recognise that special factor.
§ Mr. Nigel Spearing (Newham, South)
Is my hon. Friend aware that the dismantling of Ronan Point will be completed by January and that, on present evidence, the final evaluation in the scientific report will probably be that it will not be possible to rehouse people in blocks of the Ronan Point design—approximately six of the blocks—so some 600 flats are likely to be lost for ever?
§ Mr. Leighton
My hon. Friend makes a valuable point and I pay tribute to the way in which he has followed up the Ronan Point story over the years. The Government must recognise that special factor.
One of the commonest causes of homelessness is overcrowding. A family splits or friends are no longer willing to accommodate two households under one roof. That is especially the case with young marrieds, crushed 1257 in with relatives, who start to have children. In the whole of England and Wales only three local authorities have more overcrowding than Newham.
Unemployment is undoubtedly a major factor in causing family breakdowns. The additional stresses and strains caused by financial hardship, the loss of morale and other problems resulting from unemployment can undermine the endurance of people living in overcrowded and unfit accommodation. Since 1979 the jobless figures in Newham have risen by 300 per cent. In 1979 the figure was 6,000 but now it is nearly 20,000. The male unemployment rate is officially 21.3 per cent.
The cheapest house to buy locally costs £40,000 and the mortgage payments are well beyond the average wage. The supply of privately rented accommodation has virtually dried up and what little is left often consists of the poorest quality housing with the worst conditions and overcrowding. Indeed, poor conditions and lack of security of tenure will make over 200 households homeless from private rented accommodation in Newham in the current year.
The borough's age profile is changing and the numbers in the age group 16 to 29 are growing quickly, as are their housing needs. All these factors have led to an alarming rise in the number of households placed in bed and breakfast hotels—the council's last resort. That number is increasing at an accelerating rate. Between January and October of this year the number of Newham's hotel homeless rose by 180 per cent. Over Christmas 1984, Newham had one household in a hotel, but by January 1986 that number had risen to 107. Since then, the numbers have exploded, reaching 300 in early October this year. A total of 375 families in hotel accommodation is projected by next April.
Unless something is done now the crisis will quickly get worse. Already, bed and breakfast hotels across London are packed full and councils like Newham find it impossible to fulfil their statutory duty and are having to turn homeless families away.
The number of household nights in bed and breakfast accommodation has increased dramatically as each household has had to wait longer in such accommodation before being offered permanent housing. In 1981, the number of household nights was 588 and that increased to 25,863 in 1985. It is projected to be around an astonishing 100,000 in 1986. The cost of hotel charges to Newham council has risen from £26,500 in 1983–84 to an estimated £1.75 million this year. That is a burden the council can ill afford.
§ Mr. Tony Banks (Newham, North-West)
No doubt my hon. Friend is aware that it is projected that, next year, the borough could be spending about £3 million on charges for bed and breakfast. That figure, attracting the normal grant from Government, could sustain a building programme of around 2,000 units. Surely this is the economics of the madhouse.
§ Mr. Leighton
That is absolutely right and I am extremely grateful to my hon. Friend for underlining that point.
My hon. Friend will be aware that there are very few hotels in the east end of London. Therefore, only about 50 of the 300 households needing such accommodation can be placed in Newham; the other 250 have to be placed further afield, as far away as Paddington, Bayswater, Hounslow and Southend.
1258 These constituents are, by definition, in "priority need". They are people who already have more than their fair share of problems. To be physically removed from friends and their communities together with the long journeys that that involves exacerbates their problems. Many of Newham's homeless have children, and 22 per cent. of the women are pregnant. Others are vulnerable because of old age, mental or physical disability. The conditions in bed and breakfast accommodation can have serious detrimental effects on their health and well being.
The dislocation involved makes the maintenance of contact with social workers, health visitors and doctors difficult. It is estimated that Newham will be forced to put over 1,200 children into bed and breakfast accommodation this year. Inevitably, their education will be disrupted and many will be kept away from school.
Ethnic minority households have particular problems as cultural and religious dietary needs are not catered for by these hotels. The lack of cooking facilities also causes difficulty. Often these damp, overcrowded conditions, diets of cold food and take-away meals cause stress and illness. Because of the acute shortage of suitable hotels, Newham has been forced to use sub-standard accommodation. That is not only a disgrace but a danger to the health and safety of the occupants.
I am not being an alarmist, and I am choosing my words carefully, but unless extra resources are forthcoming and Government restrictions relaxed, it is only a matter of time before the next major fire, or other disaster, causes the death or injury of families.
This recourse to bed and breakfast accommodation is a monstrosity which must be ended. Before 1979, it was virtually unheard of. Now it has become the badge, and main result, of Conservative housing policy. It is not only inhuman but, as my hon. Friend the Member for Newham, North-West (Mr. Banks) has just pointed out, it is an insane waste of money. It is extremely expensive and costs more than building new homes, or housing the homeless in almost any other way.
When answering a parliamentary question on 20 December 1985 the Minister for Social Security said that the cost of accommodating a family with two children in board and lodging in London would be £13,150 per annum but that the cost of providing them with proper council housing would be just £5,060—just half the cost of keeping people in the misery and squalor of bed and breakfast accommodation. Where is the sense, where is the financial prudence in that? It is economic and social lunacy.
Bed and breakfast is the most expensive and least desirable of solutions. When I appeal to the Government for more resources for housing in Newham, I am advocating not the waste of money but its more sensible use. Money spent on board and lodging for the homeless is money down the drain. Money spent on new houses and repairing old houses is good housekeeping.
There are clear, long term financial benefits in providing more council homes. The growth of DHSS board and lodging expenditure is to a large extent the consequence of cuts in the Department of the Environment's capital investment in housing. It is absurd to pay huge sums to offer minimum relief to the victims of homelessness, instead of investing in the solution to their real problem.
The Government could make other very real savings from expenditure on new building, for unemployed 1259 construction workers would then be taken off the dole and additional tax income would be paid to the Exchequer. We need urgently additional capital allocations. The Government's restrictions need to be relaxed. The Treasury's arguments against this do not stand up against the size of the potential savings.
I hope that the Minister's reply will be constructive and that he will offer hope to the people of Newham. I hope that he will not seek to pass the buck to the council, or seek to blame it. He cannot accuse it of being profligate. For example, management costs per dwelling in Newham in 1985–86 were £183. In Wandsworth they were more—£189. Maintenance costs per dwelling in neighbouring Redbridge for 1985–86 were £767, whereas in Newham they were less than half that—£292.
Nor does Newham have a large number of empty council dwellings, or voids. If empty tower block flats are discounted, Newham's void rate is 4.5 per cent.—less, for example, than in Wandsworth where it is 4.6 per cent. Most of these voids are being repaired and improved and will be available for letting, but the scale of this programme is dependent on finance, particularly next year's capital allocations.
What will Newham's housing investment programme be next year? It will be announced very shortly. The new proposals of 3 December show that while Barnet, Bromley, Hillingdon, Merton and Richmond upon Thames—all Conservative councils in wealthier parts of London—have had their allocations increased under these proposals, that for Newham is to be cut by £6 million. That is absolutely monstrous. It is the opposite of what common sense and humanity require. The Department's proposals will be disastrous.
I hope that this afternoon the Minister will take that point on board. Regrettably, Newham, like other boroughs, has rent arrears, but it would be absurd to attempt to blame the housing crisis on that fact. These arrears have partly been caused by staff shortages, by the change to decentralisation and by staff concentrating on the turn round of voids and on getting the repairs service working efficiently. The annual cost to the borough of arrears is £681,000, and energetic attempts are being made to tackle it.
A major cause of rent arrears is financial hardship. Newham is an area of great poverty. While the number on the poverty line nationally has doubled since 1979, in Newham it has increased by 150 per cent. It is not only that some rents have not been paid; mortgages also have not been paid. No one would say that people do not want to pay their mortgages. However, growing poverty is stopping them.
Figures given by the Minister's Department last week show that the number of people whose homes have been repossessed or who are more than six months in mortgage arrears had reached an all-time high. Nationally, they show that in June 1986, 20,020 families, and single people had their homes repossessed compared to 2,530 in December, 1979. The number of people six months or more in arrears with their mortgage reached 66,930 in June compared to 8,420 in December, 1979. The Minister may mention the £15 million that the Government are giving to the Housing Corporation. This is an interesting idea, but even with the private money this would attract, the 1260 extra homes built would still be fewer than the increase in homelessness that is envisaged, so that will not provide a solution to this cruel problem.
What does Newham need? It needs immediate emergency aid this winter to defray the £1.75 million burden that the mushrooming of bed and breakfast is costing. We need a concerted attack on the main problem. This means, first, the restoration of the cuts and a substantial increase in housing capital allocation—at least to meet the council's bid for £67 million for 1987–8 to allow additional new building. Secondly, we need an increase in revenue support through reinstatement of rate support grant and an end to selective rate limitation. Thirdly, the Government should immediately lift the restrictions on councils buying empty property in good condition in the private sector. This would be the quickest acting emergency measure. Fourthly, we need the lifting of restrictions on the spending of capital receipts from, for example, the sale of council houses. The council has that money but is not allowed by the Treasury to spend more than about 20 per cent. of it per annum. That is manifest nonsense.
Fifthly, the Government should look at what other aid can be given under the urban programme and, of course, give partnership status to the borough. I have argued for that before.
Our problems have reached such outrageous proportions that only a partnership will solve them. If emergency action is not taken, the harrowing housing crisis in Newham will not go away, but will fester. Further constraint would result in diseconomies and more money wasted because forcibly ignored repair and maintenance problems will turn into major rehabilitation projects as houses are left to decay until demolition becomes the only option and the bed and breakfast bill mounts.
The Minister must appreciate that this would result in intolerable conditions for the borough's residents in both public and private housing sectors, and in turn lead to despair, vandalism, disincentive to private investment, and the downward spiral of inner-city decay from which Newham is desperately trying to escape.
I ask the Government to help, not hinder us. A programme like the one that I have outlined would, over a period of years, remedy our crisis. I ask the Government for a constructive, co-operative response and not for a dose of those Victorian values which condemn thousands of Newham people to Dickensian conditions this Christmas.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey)
The hon. Member for Newham, North-East (Mr. Leighton) has once again given me an opportunity to spell out that the Government fully recognise the problem of homelessness and are taking action on a number of fronts to deal with it nationally, and of course that includes London and Newham.
On 7 November my hon. Friend the Minister for Housing, Urban Affairs and Construction announced that the total resources for local authority capital spending on housing are being increased next year by £390 million over the 1986–87 plans. That is an 11 per cent. increase in real terms. He also announced that allocations to local authorities through the Government's urban housing renewal unit, henceforth to be known as Estate Action, are to be increased from £50 million this year to £75 million 1261 in 1987–88. In particular, he announced that the Housing Corporation is to receive an additional £20 million next year to generate £45 million to £50 million of additional private sector investment for priority work aimed at getting homeless families out of bed-and-breakfast hotels and at providing accommodation for young people moving to take up jobs in areas where there is a shortage of rented housing.
This year, in addition to a basic allocation of £430 million of housing investment resources, the London boroughs will benefit from an additional £14 million to £15 million of housing investment and urban programme money in support of projects developed in association with Estate Action to renovate estates and improve standards and effectiveness of management. In addition to the substantial borrowing power which the Government allocate to local authorities to enable them to maintain, improve and, where necessary, add to their housing stock, they are allowed to make use of capital receipts. In 1984–85 the London boroughs were able to supplement their HIP allocation to the tune of £280 million to produce an overall spending power of over £880 million.
In addition to local authority funding, the Housing Corporation also provides significant resources. In the current financial year national funding is £685 million, the same in cash terms as for last year. Funding is being focused on 80 housing stress areas, many of them in the inner cities, and including Newham and 20 other London boroughs. In 1985–86, Housing Corporation funding provided nearly 6,500 newly built and rehabilitated fair rent dwellings in London and the home counties. A significant proportion of those dwellings are reserved for those with special needs who might otherwise be homeless.
There is another side to the resource balance sheet—the efficiency and effectiveness with which existing resources are being used. Here I really must express concern about the still unacceptable level of voids in London and about the scale of rent arrears owing to the London boroughs. Although, thanks to the efforts of several inner London boroughs following the Department's circular of last year on empty dwellings, there has been a small net reduction in the number of local authority owned dwellings, there are still about 28,000 vacant local authority dwellings in London, more than 9,000 of which have been empty for more than a year. Nearly 6,000 empty local authority dwellings are available for letting. Efforts should be made to reduce that figure still further, through improved letting rates. At present 11,000 units are vacant, undergoing repair and improvement. Of the 9,000 long-term empties, 2,000 are awaiting demolition or sale to the private sector. Nearly 7,000 are awaiting repair or improvement.
As my hon. Friend the Minister for Housing, Urban Affairs and Construction said, the highest priority in the spending of housing resources should be on the maintenance and renovation of the existing stock. The task is not helped by the appalling rent arrears among the London boroughs. Arrears totalled £86 million at 1 April 1985 and provisional figures for 1986 suggest that they have risen still further. This effectively means that large amounts of much needed day-to-day maintenance and repairs funded from revenue have to be forgone, leading to a large backlog of major capital repairs, which, in turn, directs resources away from the critical task of bringing the empty units back into use.
1262 Nor is the position helped by the fact, spelt out in the Audit Commission's report "Managing the Crisis in Council Housing", that many local authorities have fixed rent at levels that are simply insufficient to keep buildings in good repair. The commission's assessment of rents and housing costs for 1984–85 showed that, net of subsidies, interest on capital receipts and non-rent income, average gross rents charged by London boroughs were £7 per dwelling per week below the level required to cover interest charges and the costs of management, maintenance and repairs. These are fundamental criticisms of the way in which the local authority owned stock and housing resources are being managed, and I would urge London boroughs, including Newham, to get to work on bringing the empty units back into use as a first priority.
Hon. Members will understand that the Government are distinctly uneasy about the suggestions that we have received from representatives of the local authority associations that the way to deal with the problem of homelessness is through the acquisition of yet more property. In view of the evidence that the existing stock is still not being used effectively, and bearing in mind that municipalisation does not usually result in housing gain, we do not feel that it would be right at this juncture to permit another round of large-scale municipalisation. That said, we are in regular contact with the local authority representatives and we are keeping the position under review.
I remind hon. Members that, in addition to last year's 10 July circular setting out ways in which better management could reduce the number of empty dwellings and recommending a greater use of short-life schemes, we also relaxed the housing association grant regime to facilitate grant-aiding of short-life schemes. We grant-aid a London mobility scheme to enable people to be housed as and where accommodation is available, and in the current financial year we have increased to £500,000 the amount of grant which we make available to voluntary bodies concerned with homelessness.
We recognise, however, that there is a need to get homeless families out of bed-and-breakfast accommodation as quickly as possible, not only because we are concerned at the size of the bill to the public purse, with London authorities spending over £26 million on bed and breakfast, but because such accommodation is generally unsuitable for families with children. The Department's code of guidance to local authorities on this matter makes it clear that bed-and-breakfast accommodation is to be used only in the last resort. Now, the last resort is too often becoming commonplace. That should not be so.
In view of the immediacy of the problem, we have decided to make available, from this year's Estate Action resources, up to £4 million to help those local authorities with serious homelessness problems to bring back into use within the current financial year empty dwellings on their estates.
Newham was the first London borough to respond with a satisfactory bid to us for funds, and on 27 November my hon. Friend the Minister for Housing, Urban Affairs and Construction approved £250,000 of additional resources for a scheme on the Woodlands estate to bring back 23 empty flats into use to benefit homeless families. So, in total, this year Newham, on top of a basic HIP allocation of £21 million, has benefited from an additional £1.5 million of Estate Action resources. Newham was among the first of the London boroughs to be visited by the Estate 1263 Action team with a view to identifying projects for support in 1987–88. Suitable schemes have been identified and the Department is expecting to receive formal bids shortly.
When we met representatives of the local authority associations in July this year, we pointed out that we are prepared to consider on their merits applications from local authorities to acquire properties suitable for use as hostels providing temporary accommodation for homeless families. To date, only a few authorities have come forward with proposals. Consent has nevertheless been given, within the last few months, to acquisitions which at any one time will afford temporary accommodation to at least 100 homeless people. I understand that Newham has run into some difficulty with its initial proposals, but I look forward to receiving an application soon.
Let no one say that the Government do not care about the plight of the homeless. Of course we do, and I have mentioned today some of the ways in which we are trying to help.
1264 Ultimately, however, the responsibility for finding a solution lies with the local authorities. They have the powers and the resources to deal with the problem and they are free to determine their priorities according to their assessment of need. In fact, between 1980 and 1986, local authorities in London let homes to about 68,000 homeless families. The number of lettings to homeless families has increased under this Government from 12,700 in 1980 to nearly 18,500 in 1986.
I am pleased to say that many London authorities are taking their own initiatives to deal with the problem. Several have introduced incentive schemes to encourage those occupying council accommodation but who could afford, with a little assistance, to buy in the private sector to do so, thus releasing rented accommodation for those who have greater need of it. The Department is currently monitoring the effectiveness of——
§ The Question having been proposed after half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
§ Adjourned at seven minutes past Three o'clock.