That in respect of Class XX, Vote 18, for expenditure by the Property Services Agency of the Department of the Environment on acquisitions, public building work, accommodation services, administration and certain other services for civil purposes in the United Kingdom, the balance to be surrendered to the Consolidated Fund he £171,101,000.
§ Sir Hugh Rossi (Hornsey and Wood Green)
This is the third time that the Select Committee on the Environment has reported on the Main Estimates of the Department of the Environment and the Property Services Agency, and the third occasion upon which the reports have been debated. As on previous occasions, the Committee has examined all the Estimates concerned, except defence accommodation, and is in general satisfied with the justification given for the Estimates. However, it has selected particular matters to which it believes the attention of the House should he drawn before Supply is voted. We inquired into the relevant sections of the public expenditure White Paper as well as the Estimates themselves.
There are two motions on the Order Paper in my name for reductions in two sub-heads. Depending upon what my hon. Friend the Minister says, I am prepared to press them to a Division at the end of the debate. They do not necessarily involve the most important subjects in our report, but, as the House knows, our conventions governing the Vote of Supply allow us to propose reductions, but not increases. A number of our past recommendations have been accepted by the Department, for which we are grateful, and by the PSA. Those are acknowledged in the appropriate places in our reports, and some of them are listed in paragraph 3 of the report on the Department of Environment's Main Estimates.
The two reports deal with some new subjects, but also explore further subjects upon which we have reported in the past. It is not to be expected that major subjects such 239 as the maintenance of the country's housing stock can be disposed of in a single year, so we make no apology for returning to such matters.
The first subject that I wish to raise is on page vii, paragraphs 5 to 8, of the third report on the main Estimates, and relates to housing mobility. Under the national mobility scheme, local authorities agreed to make available 1 per cent. of their lettings to people moving into their areas from other parts of the country. The result so far has been pathetically small—only 6,000 houses were successfully released under the scheme in 1984–85. We have previously made proposals for improving the scheme and we make fresh proposals in our report. I hope that they will be acted upon.
The scheme would help the mobility of the unemployed by assisting them to move into areas where jobs might be available. The root difficulty may be local authority reluctance to provide accommodation for new arrivals because they want to concentrate on those on their housing waiting lists. That is understandable, but more should be done to increase the mobility of labour. Perhaps my right hon. Friend the Secretary of State for Employment should take an active interest in this matter and discuss it with environment Ministers. I hope that my hon. Friend the Minister will respond to the debate more positively and less defensively than he has in the past—reluctant though he may be to upset local authorities. There is little point in setting up a national mobility scheme unless he is prepared to see it work. If it is defective, it should be replaced by a better scheme.
My next subject, dog and game licences, is referred to on page viii, paragraphs 9 to 12, and is becoming a hardy perennial. The Government are asking the House for £3.87 million to pay the Post Office to issue licences that bring in only £900,000 in revenue. That is nonsense, which is why I have tabled a motion that the House should not vote the £3.87 million.
Successive Governments have dithered about this matter since 1974. I recall tabling a new clause to the Control of Pollution Bill in that year, asking for changes in the system of control and protection of dogs. That led to the setting up of a working party which reported in 1976, and which made many recommendations that were widely welcomed. However, there is still no sense in the current system. When taking evidence we found that an overwhelming majority of people would prefer money to be spent on a dog warden service at local level. There is a need to collect strays and most of us, whether or not dog owners, want dogs to be kept under reasonable control in public places and the pavements in towns to he kept clean.
The Government appear to be making unnecessarily heavy weather of this issue. It is very controversial, but it cannot be ignored for ever. It is absolute nonsense to pay the Post Office more than £3 million a year simply to push pieces of paper across counters to half of the dog owners in this country—the other half not bothering to take out licences, and there being no prosecution for those who fail to do so. The law is a dead letter. We are spending a large sum that could be put to better use. I know that my local hospitals need kidney machines, and that £3.87 million would provide quite a few of those. We should not waste that money.
§ Mr. Richard Alexander (Newark)
Does the position that my hon. Friend describe mean that those who refuse to take out dog licences, and are therefore acting illegally, are saving the country money?
§ Sir Hugh Rossi
That is the strange position in which we find ourselves. One recommendation could be that all dog owners should break the law and not buy licences, thereby saving the country almost £4 million. I know that my hon. Friend the Minister will be appalled that such a suggestion should come from these Benches, but illegality would not be necessary if only he would act.
§ Mr. Kenneth Hind (Lancashire, West)
If a law is effectively unenforceable, does that not make the law look an ass and undermine the basic fabric and authority of this House? Is it not about time that we tackled the problem once and for all?
§ Mr. Norman Miscampbell (Blackpool, North)
The House should remember that there is a considerable body of opinion that dogs should be properly licensed and that simply to abandon licences would cause chaos in our streets. A proper dog licence, politically difficult though it may be, might be a better and more acceptable alternative.
§ Sir Hugh Rossi
As the House is no doubt aware, in Northern Ireland a higher fee is paid for a licence and the money is devoted to a proper system of dog wardens, to the benefit of both the general public and the dogs. Indeed, we have recommended that course in our report, and the Government should address themselves to it. If they feel that some form of dog licence is necessary, they should ask local authorities to operate the system because they know the amount of control that is needed in their areas. In some areas a system of control is more necessary than in others. That matter was suggested by the working group nearly nine years ago, yet today we are still discussing it and no progress has been made. The fault does not rest simply with this Government. Previous Administration have also fought shy of tackling this problem, probably because there are many dog owners and it was feared that they may be offended in the process.
1 would like to consider briefly the homeloans scheme which was introduced in 1978. That scheme had the commendable objectivity of encouraging home ownership for first-time buyers. Unfortunately, the sum which the scheme provides — £110 plus a £600 loan — has never been updated and has remained the same for eight years. That is now quite derisory. The Government should either make the scheme more attractive and advertise it, so that first time buyers know that it exists, or wind it up. The scheme seems to be nonsense.
The scheme is also a compromise. The original scheme proposed from the Opposition Benches in 1978 was a pound for a pound grant scheme to first-time buyers with a cut-off point at £3,500. However, the Government in 1978, stampeded somewhat by that suggestion before a general election, brought in the present mouse of a scheme, which has been a failure. I hope that my right hon. and hon. Friends will consider whether home ownership is now so popular that this kind of incentive may no longer be required since 62 per cent. of people currently own their own homes. If so, perhaps the scheme should be disposed of and the money allocated elsewhere.
241 The most important matter dealt with in the report on the Department of the Environment's Main Estimates is housing maintenance. Unfortunately, up-to-date information on the state of the housing stock is lacking. There has been no progress on that since the housing condition survey in 1981. However, updating the figures in the report, some £40 billion needs to be spent on repairs and renovations.
The money spent at present is doing little more than preventing the backlog of maintenance from growing. We should not delude ourselves over this matter. A firm action programme is needed. When we took evidence, it seemed as though the Department was inclined to shelter behind the fact that up-to-date information from the 1986 house condition survey must also be available. However, we know that that information will not be available for another two years. That is rather a long time to wait when it is already accepted that a vast sum of money needs to be spent.
We have therefore made a modest suggestion that steps should be taken to have the preliminary results of the 1986 house condition survey available not in two years' time but in nine months. At the very least, I hope that my hon. Friend the Minister will be able to assure us that that information will be available.
§ Mr. Chris Smith (Islington, South and Finsbury)
Before the hon. Member for Hornsey and Wood Green (Sir H. Rossi) moves away from the report on the Main Estimates, may I draw his attention not to the main body of the report but to appendix 4 on page 34 and a supplementary note provided after the Committee had concluded its deliberations about the housing associations' construction programme? Is it not alarming that the figures show that, for scheme approvals and dwelling starts in the current financial year, there has been a drop of more than 20 per cent. in both those categories for housing associations? Should we not draw that fact to the attention of the House and ask the Government hard questions about those cuts in housing association provision?
§ Sir Hugh Rossi
No doubt my hon. Friend the Minister has heard the hon. Gentleman's intervention and will deal with his points in the course of his reply. We must bear in mind that other figures have been put about concerning the excess of accommodation in relation to households. The Opposition produced a Green Paper many years ago when they were in government which stated that the problem was local and that there was a need for public sector housing for specialist groups such as the disabled and sheltered housing for the elderly. No doubt the Minister has more facts and figures at his disposal about these matters and I hope that he will be able to satisfy the hon. Member for Islington, South and Finsbury (Mr. Smith).
§ Mr. David Winnick (Walsall, North)
The hon. Gentleman said that the provision of public sector housing should be for specialist groups. Whatever may have been the position in 1977, would he not agree that in the large cities — for example, London — many people, even on average earnings, simply cannot begin to buy a place because of house prices? That does not simply apply to London; the hon. Member for Hornsey and Wood Green (Sir H. Rossi) must be aware of the position in his own constituency. Does that not strengthen the argument that 242 many people — not just the poor — desperately need public sector accommodation, without which they will not be able to resolve their housing difficulties?
§ Sir Hugh Rossi
I accept that many families, especially in the inner cities, cannot begin to contemplate the purchase of their own house, although there are many valuable schemes, such as equity sharing, which have been produced to assist as many groups as possible.
Part of the inner-city problem— I am sure that the hon. Member for Walsall, North (Mr. Winnick) will not welcome this argument — is due to the fact that the private rented sector has died. We can look to certain legislation which has created an artificial shortage in that area and which has exacerbated the position for many families, especially when one considers that at one time the majority of housing provision was in the private rented sector. That has been killed off by legislation. We must take a much broader view of the position than that taken by the hon. Member for Walsall, North if we are considering an all-round solution to the problem.
§ Mr. Robert B. Jones (Hertfordshire, West)
Is not part of the explanation for that the commitment or lack of commitment of local authorities? Is my hon. Friend aware that Wandsworth council, which has many inner-city problems, has increased its owner-occupation rate from 27 per cent. to 53 per cent. since the Conservatives captured control of the council in 1978? That has been achieved with the assistance of many imaginative schemes which could be copied by the local authorities controlled by the Opposition which are so adamantly against home ownership.
§ Sir Hugh Rossi
As always, my hon. Friend is well informed and, as usual, he is correct.
I would like to consider the Select Committee on the Environment's fourth report on the PSA's Main Estimates for 1986–87. In that report we have made a number of recommendations about the PSA system of accounting and the way in which money is made available to the agency by the Treasury. I should like to draw attention to three points.
First, we should like some hard evidence about whether the property repayment services system is producing economies. For three years, the PSA has been charging Departments for the accommodation they occupied. A vast amount of paper work is involved but there does not appear to be much evidence that the new system has resulted in more economy in the use of accommodation. What is the point of a reform of this magnitude if the results are not being monitored? They cannot be being monitored because nobody can give us the information that we want. Are we expected to believe in the PRSS as an act of faith?
Secondly, the PSA should have a proper set of commercial accounts. It would like to follow a policy of buying and building more office accommodation and relying less on the expensive alternative of leasing it. The agency is inhibited from doing that because the cost of capital investment is charged in Government accounts in the year in which it is incurred. From the point of view of annuality, therefore, it is easier to pay a smaller yearly rent than to pay for the freehold in one year.
All commercial properties are now subject to stringent rent review clauses. Gone are the days when one could get a 21-year lease on a fixed rent. Rents now have to be 243 reviewed every two or three years and in no time at all they exceed what would have been the cost of buying the freehold in the first place. That is a ridiculous situation into which the Government should not have got themselves and it is substantially the result of the Treasury convention of annuality. Environment Ministers should speak to their opposite numbers in the Treasury to see whether their accountants, whose ingenuity is no doubt unlimited, can find a means of spreading the cost over the lifetime of the asset, as any commercial undertaking would for the purposes of its accounts.
Thirdly, freeholds come on the market on favourable terms at very short notice. It is silly that the PSA is unable to buy freeholds when they suddenly become available. It should have the money to buy them, but the Treasury refuses to make money available on a contingency basis. To anybody in the commercial world, that is bad business. We see no reason why the Government should not conduct themselves on more commercial lines for the benefit of taxpayers.
§ Mr. Miscampbell
It might be useful for the Government to explain at the same time why they will not borrow from the commercial market if they do not want to produce the money themselves. Although they could buy the freehold of a property which they will need in a year or two at the most convenient terms, they refuse adamantly to go to the commercial market which is running with money and would lend to them. That would be a far cheaper approach.
§ Sir Hugh Rossi
My hon. and learned Friend will know that there is a glimmer of hope. We were told in evidence that consultants have been hired to advise on these matters. Their remit should be made as wide as possible to cover the issues that my hon. and learned Friend mentioned and their report should be expedited. Perhaps a Treasury Minister rather than my hon. Friend the Parliamentary Under-Secretary of State should be present to answer today.
One of the Select Committee's major worries concerns acquisitions and new works. They are dealt with in paragraphs 22 to 32 of the report. The PSA's original estimates of the cost of the new works have turned out to be wildly wrong in a significant number of cases. I shall give only two of the many examples that were given in evidence. The original estimate for a building for the Foreign and Commonwealth Office is being exceeded by 114 per cent. and the estimate for a court for the Lord Chancellor's Department is being exceeded by 77 per cent. Part of the fault lies with the commissioning Departments, which chop and change their requirements and specifications. Each time they do that, the cost of the project increases. There should be firmer control over commissioning Departments and the changes that they are permitted to make. Part of the blame, however, attaches to the PSA for inaccurate estimates. We are glad that the agency proposes to carry out a study into its estimating performance.
As an expression of the Committee's disquiet, however, I have tabled a motion which would reduce that sub-head of expenditure by £20 million. I hope that my hon. Friend's reply will obviate the need for me to move it formally.
244 There is an alarming backlog of maintenance on the agency's Civil Estimate, amounting to £100 million, which seems to be growing. We all know that neglected maintenance leads to more expensive hills. The point has been reached at which the Treasury must make increased resources available, as the other sub-heads of the agency's budget have been bled white.
I hope that we can hear satisfactory replies to the issues that I have raised. In view of the criticisms that we found it necessary to make in our report on the PSA's Estimates, the Committee has it in mind to carry out a full inquiry into the PSA during the next Session.
§ Mr. Allan Roberts (Bootle)
I should like to put on record the fact that, as well as speaking from the Front Bench on behalf of the Opposition, I am a member of the Environment Select Committee, and I am pleased to speak after the hon. Member for Hornsey and Wood Green (Sir H. Rossi). I should like to pay a compliment to him as he chairs our Committee adeptly and skilfully. He guides us effectively, especially when it comes to choosing subjects on which we can produce reports that have all-party support. I pay that tribute, even if I disagree with some of what he said today. This debate is a little more political than our discussions in Committee.
I shall concentrate on the Select Committee's report on the Department of the Environment's Main Estimates. My hon. Friend the Member for Blackburn (Mr. Straw) will address himself later to the report on the PSA. I want to mention gipsy sites, the Liverpool garden festival, which affects me in terms of constituency interest, dogs, help to first-time buyers, home owners, housing mobility, housing maintenance and the report's references to the traditional urban programme.
The Environment Select Committee recently followed the hippy trail through the west country on its present inquiry into ancient monuments and historic buildings. Many of the local authorities which complained about the the peace convoy and said that they needed stronger laws of trespass to deal with it would have had the powers that they wanted if they had provided gipsy sites under existing legislation. If they had provided such camps, they would have been able to prevent travellers such as the peace convoy from squatting on land. Although there are 469 housing authorities, there are only 232 sites. The Select Committee welcomed the Government memorandum, the circular that has gone out from the Department of the Environment, but urged the Government to review the legislation and put strength in it so that local authorities which are not providing sites will have to provide them.
§ Mr. John Mark Taylor (Solihull)
I should like to take the hon. Gentleman a little further on the matter of caravan sites and the so-called peace convoy. Is he honestly endeavouring to tell the House that if all the local authorities followed to the letter the law about the registration of necessary sites for itinerant people all the malpractice and anti-social behaviour of this so-called peace convoy would go away, and that the members of that convoy would settle down happily in any such designated sites?
§ Mr. Roberts
I am speaking about the laws that local authorities need to move travellers on. The peace convoy comes within the definition of the legislation on gipsy sites. 245 The local authorities would have had the stronger powers that they seek under the law of trespass to move those people on if they had provided sites. I do not want to spend all my time discussing this issue because I should like to move to other points.
§ Mr. Robert B. Jones
The hon. Gentleman has spoken about designation, and that would certainly give local authorities more powers in respect of public land. The point that arose in the west country related to private land. The law was perfectly clear but getting rid of these people caused the farmer great frustration and cost. That is the point that worries everybody.
§ Mr. Roberts
I am well aware of the things that worry people because we met worried people on our journeys. Local authorities have powers to move on travellers if sites are provided, but only 232 local authorities have provided sites. As the Select Committee said, this leaves some 35 per cent. of gipsies and people who travel—leaving aside the peace convoy—without sites on which they can legally park. Something needs to be done about that before we become critical of travellers who trespass.
I am pleased at the way that the Liverpool garden festival turned out. The Select Committee highlights that the festival cost £14.822 million to design and construct and £5.447 million to run. That is a total of over £20 million. The total revenue was £6.398 million, and that makes it look as if there was a loss on the festival of over £13 million. However, if we take account of the contributions of £883,000 and the £5 million value of the exhibition site and the buildings that were left, the loss is reduced to about £8 million.
Partly at my request, the Select Committee visited the site. That visit was a catalyst that got people moving. Our inquiries were informal and unofficial and as a result the development corporation was able to bring in a private company, Transworld, and public sector involvement through the Merseyside development corporation. That has transformed what was to be a one-off international garden site into a permanent facility for the people of Merseyside. Transworld will invest £5.5 million and this year it has already spent £1 million on maintaining the facility. The company is investing money to turn the area into a major theme park.
But for public expenditure and effort and the visit of the Select Committee on the Environment and this private sector partner, a formerly derelict dockland area would not have been transformed into a permanent benefit for the people of Merseyside. It is a pity that a lot of other development corporation land is still empty, despite having its negative value removed. Developers and private sector firms are not coming in, and perhaps the lesson is that a bit more public expenditure is necessary as a catalyst.
The Committee recommends that the present dog licence should be abolished and that consideration should be given to empowering local authorities to raise revenue by the issue of dog licences at appropriate fees to cover the cost of a dog service. There would be certain exemptions. As the Select Committee points out, there are 5 million dogs in Britain. I think they are all in Bootle. When I leave my front door in Bootle it is like entering a safari park. I was in the local supermarket the other day—not the Coop—and a dog came in and peed on the South African oranges. One of my constituents said, "What will you do about that, Mr. Roberts?" I said, "I will buy Australian."
246 We need action to deal with the problem of dogs roaming in the streets and fouling the pavements. The dog licence is an insult because it is too expensive to collect. Local authorities should be given responsibility and power to deal with the problem and the Government should stop collecting the licence money. Local authorities could easily impose a heavy licence fee and use the money to run dog warden services. A service like that would be appreciated not only by people such as I who are not fond of dogs. Dog lovers would appreciate it as well. That is because it does dogs no good to roam neglected as they do.
The hon. Member for Hornsey and Wood Green called the home loans scheme a Labour Government's miserable little scheme introduced just before a general election. It is better than any scheme that this Government have introduced. The home loans scheme that the last Labour Government introduced in 1978 was a fair attempt to enable first-time buyers who had saved some money to receive grants and loans from the public purse. That was an attempt to help create genuine owner-occupation. The scheme should be extended and developed and we shall do that when we form the next Government.
We believe in owner-occupation and especially want to help first-time buyers. If the Government ask where the money will come from, let them look at the latest Estimate for 1985–86 which puts the total tax relief for qualifying interest on loans for the purchase or improvement of owner occupied property at £4.750 million. I am not suggesting that we should abolish income tax relief for owner-occupiers, but there is nothing wrong with redistributing that money.
A basic 29 per cent. rate taxpayer with a 25-year repayment mortgage subject to MIRAS and an interest rate of 11 per cent. in the first year and a £12,000 mortgage receives £383 in tax relief per year. A person with a £30.000 mortgage, the maximum amount for which income tax relief is obtainable, receives £957. That is wrong. It is a system of subsidising owner-occupation that is based on that old English principle that the richer you are the more help you need with your housing. We want to see first-time buyers, the lower paid and house purchasers in the lower price range given more help by redistribution of the money.
§ Mr. Roberts
I will not give way because lots of other hon. Members wish to speak.
I am not surprised that the hon. Member for Hornsey and Wood Green and the Select Committee on the Environment said:We understand that the Minister has been unsuccessful in persuading local authorities to agree toprovide a certain percentage of their housing stock to allocate to people coming in from other local authorities. I regret that, but it is not surprising because if local authorities do not have the houses to allocate to their own people they will be understandably reluctant to allocate them to others.
The reason for the shortage of housing is that the public rented sector has declined under this Government because it is being sold off and also because hardly any new council houses are being built. That is why the mobility scheme is not working and why local authorities are reluctant to give houses to people coming in from other areas. They have no houses to give to people on their own waiting lists, homeless people indigenous to their areas.
247 In 1981 house building fell to its lowest level since the 1920s. Under this Government public sector house building has been slashed. Fewer than 40,000 new council houses were started in 1984 and fewer still in 1985 — about 70 per cent. down on 1978. Taking public and private house building together, homes started under the Government are 37 per cent. below the number started under the previous Labour Government. The claim that the private sector can make up the lack of new council houses is clearly wrong. Over 500,000 extra homes would have been built by last year if Labour's house building plans had been maintained.
The report of the Select Committee on the Environment on house maintenance is a damning indictment of the Government's housing policy. Because it is an all-party Committee, it is in softly, softly language, but, none the less, it is an indictment. Our last report said:It seems certain that there is a very large backlog of housing maintenance at the present day and, against that background, it seems to us imperative that the available resources are appropriately distributed between the private and public sectors.That report talked about £30 billion — £40 billion at present day prices — being needed to maintain our housing stock. It goes on:According to the Department's recent enquiry into the state of the public sector stock, some 3—8 million dwellings out of a total of 4—6 million require some attention and the total capital expenditure required is some £19 billion ie an average of about £4,000 a dwelling.The Select Committee concludes:We are concerned—that is putting it mildly—about the state of repair of the housing stock. Neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on.Then comes the prediction of the return of the bulldozer—Some property, particularly in the public sector, may be near the point where replacement rather than renovation becomes the only realistic but more, much more expensive option.The crisis highlighted by the Select Committee is a major one, growing into one of 1945 proportions. One third of today's homes were built before 1919. The worst conditions are in the private rented sector which Conservative Members want to revive. Nearly half of all unfit homes are owner-occupied. In England and Wales 1.25 million homes are unfit for human habitation and I million lack one or more basic amenities such as an inside toilet. In the United Kingdom 2.5 million are seriously affected by damp; 3 million require immediate repairs, each costing £2,500 or more; and 1.5 million have serious design defects.
§ Mr. Robert B. Jones
The hon. Gentleman is clearly implying that a great deal of money should be spent on this problem. He has already told us that he believes in altering the tax relief system. At what level would tax relief be withdrawn by an incoming Labour Government?
§ Mr. Roberts
At the high rates.
The backlog of repairs and the blame for the current housing crisis that the Select Committee highlights lies firmly with the Government. They have repeatedly cut the budgets for housing expenditure. Indeed, since 1979 housing has borne the brunt of public spending cuts, with expenditure cut by more than a half, taking account of inflation. As a result, the proportion of its national income that the United Kingdom spends on housing is far smaller 248 than that of any other EEC country. That is the housing crisis as highlighted clearly by the Select Committee's report.
The Select Committee received from the previous Secretary of State for the Environment, now the Secretary of State for Education and Science, a note on urban policy headed "Traditional Urban Programme", which is optimistic. But we must realise that the urban programme is not an urban policy. It is financially, managerially and politically marginal to urban government. In 1985–86 the urban programme comprises only £2 in every £10,000 of total planned Government spending. The base urban programme allocation for some programme authorities is less than 2 per cent. of their revenue budget.
I welcome every penny of urban programme money that the Government give, especially if it comes to Bootle, but we must put it in perspective. Total urban aid from 1981 through to 1987 is £1,910 million. Government cuts in rate support grant to local authorities were nearly eight times more than that—£8,060 million. The only way to solve the urban problems of our inner cities with which local authorities are having to battle is not through the urban aid grant but through the mainstream programmes of local authorities which are highlighted in the report, such as housing and so on, about which the Select Committee is concerned. The only way to solve the problems is by increasing Government expenditure, not reducing it. I regret that the Select Committee cannot table any resolutions to increase expenditure rather than reduce it. If that were possible, that is what the Opposition would be doing.
§ 8.5 pm
§ Mr. Robert B. Jones (Hertfordshire, West)
I have greatly enjoyed being on the Select Committee on the Environment for the past two and a half years. Now that I am due to leave it I should like to take this opportunity to say that I very much enjoyed co-operating with hon. Members from both sides of the House during the production of our reports, and, in particular, serving under the chairmanship of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), one of the outstanding Chairmen in the House, who has led us through a series of most interesting subjects, not the least of which are the two that we are considering today.
If I have one main regret about leaving the Committee, it is that I shall not be able to serve on the Committee during its detailed consideration of the Property Services Agency in the coming year. There is a major job to be done in that area.
I want to refer in particular to two recommendations which are dealt with in the Select Committee's report and I shall take them, if I may, in reverse order. Recommendation 32 relates to the acquisition of freeholds. My hon. Friend referred to that in his speech. I find it baffling, and I know that other members of the Committee did too, that the policy on the acquisition of freeholds is not a calculated one on the basis of the facts available to the PSA, but is an ad hoc policy, based entirely on whether there happens to be any money in the kitty at the time. It cannot be right that it should wait until the last weeks of a financial year, knowing, as many Departments do, that they have to blow the money or hand it back in order to develop its property policy. It should have a clear set of criteria by which it decides whether to purchase and there should be a fund within the PSA estimates which 249 entitles it to acquire far more buildings than it has at present. There is no doubt whatever, given the recent history of property prices, particularly in the cities and the south-east, that freeholds are a good buy.
Recommendation 31 refers to the central point, if I may call it that, of the report-the competence of the PSA in dealing with its programmes and projects. I took up two particular projects in some detail during cross-questioning of witnesses from the Department and I want to refer in particular to them.
The first is the Hanslope park scheme. That is the uprating of an engineering service in a Foreign and Commonwealth Office establishment. That has overrun by £1,500,000 on an original cost of £1.1 million. That is an astronomic increase. Some increases are because of things that have happened in the meantime, which have resulted in extras being added in. I agree with my hon. Friend that it is most unwise to change the specification to provide more or different accommodation or whatever, because that does not give good value for money in terms of purchasing construction work in the private sector, but it is even more illogical that the whole building had to be redesigned to bring the engineering services up to current safety standards. That was responsible for £630,000 —40 per cent.—of the overrun. The reason for that was that it was very late in the day when the Department decided to consult the laboratory of the Government chemist. If it was important to consult the laboratory of the Government chemist about the design, surely the proper time to consult was at the beginning of the project, not halfway through so that it resulted in a significant overrun. When I questioned the witnesses from my hon. Friend the Minister's Department they could offer no real assurance that it would not happen again. Indeed, they seemed thoroughly complacent about their performance on this and other matters.
The second project is the Derby Crown courts. One would think that the Property Services Agency had some experience of courts. After all, it has dealt with them in a number of different parts of the country. It has overrun with monotonous frequency, but I am sure that in part it is due to the Lord Chancellor's Department revising its requirements. I hope that my hon. Friend will take up vigorously with the Lord Chancellor the point that he, too, should get things right at an early stage.
There are two other factors involved beside changing the specifications. In mid-1983, in the middle of the project, the Civil Service Catering Organisation changed its catering policy to include a coffee shop style of catering in some courts and provided a completely new brief. That cost the taxpayer an extra £41,000. Admittedly, that is small in terms of the total overrun of £2.7 million. That overrun relates to an original estimated cost of £2.9 million, almost as bad as the other example I gave.
The real villian of the piece was the PSA, which, on examination of the design, decided that it was necessary to make improvements, particularly in the fire escape routes from the dining and jury circulation areas. The consequent redesign was more expensive. That was £696,000 out of the total £2.7 million overrun. What happened? It is curious, but the fire authority was not consulted until late in the project. I find that extraordinary and when I cross-questioned witnesses from the Minister's department they said:The lesson we have learned from this is that it is not good enough to devolve responsibilities for designing something as 250 complex as a court to our regional organisation simply on the basis that they have the requisite numbers of architects or engineers. One must make a more detailed inquiry as to the skill and experience of these architects and engineers that we now have.Anyone who has any experience of the private sector in dealing with construction projects would have known perfectly well that that was the case. Anyone in a private sector company who placed an order with a company for a design of a building without having investigated whether it was capable of carrying out the project would deserve to be sacked on the spot. I ask my hon. Friend the Minister to say what disciplinary action has been taken against the civil servants in the PSA whose incompetence cost the taxpayer £700,000 on one project alone.
Those are just two examples out of a whole list that the Committee examined. We have examined similar examples in previous years and I am grateful to my hon. Friend the Member for Hornsey and Wood Green for having secured this debate. It is about time that the scandals came to public attention and time that the Minister really took control of the PSA to make sure that we do not have the same sad story next year. If we do, it will not only be the Select Committee on the Environment which will be seeking a debate in the House on the PSA estimates; it would rightly and properly be something being sought by other Select Committees, by Opposition Members and by my hon Friends.
I shall turn to a number of items in the Department of the Environment's main heading. Some of them have been touched on by the hon. Member for Bootle (Mr. Roberts). I simply wish to put a somewhat contrary view, which will not surprise him, on one or two points. First, I shall deal with gipsy sites. My hon. Friend the Member for Hornsey and Wood Green touched on the points on which we had cross-questioned the Department of the Environment. Of course, the letter is appended to the report.
Those of us who have constituencies which are on the fringe of urban areas know what the problem is. When an authority applies for designation saying that it has sufficient official sites to cater for the number of gipsies in the area, one may get an influx from all sorts of other neighbouring areas, especially if they had designation first. My hon. Friend the Minister responsible for planning and the designation of gipsy sites has tried to deal with applications on an inward-outward basis because that is the right way to do it. However, he is still sitting on the application for designation by Hertfordshire county council in respect of Dacorum borough council, which covers my constituency and part of the constituency of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page).
In the middle of the Minister's consideration, one of the local Socialists in Berkhamsted challenged the consultation process in the courts. She was perfectly entitled to do that. Of course, it went out for further consultation and it has gone back to my hon. Friend for another examination. I think that he must make an urgent decision on this because we are suffering every bit as much as people in Somerset from influxes of caravans, or various sorts of people who camp out on the byways, tear up the hedgerows, chop down young oaks and cause a great deal of petty and serious crime in the area. Obviously one wishes to see proper arrangements for permanent housing and schooling for many of those families. However, I do not think that it is right for any local authority to be 251 required to cater for the sudden influxes that come from different parts of the country at any one time. I hope that my hon. Friend will convey those thoughts to the Minister responsible.
I want to refer to Vote 4 in passing. My hon. Friends on the Select Committee are aware of the fact that it was at my suggestion that the Select Committee did a one-day inquiry into the use and future of Hampton Court palace. It was a most interesting study, which provoked some interesting and quick decisions on the part of the Department of the Environment. Quick decisions are often welcome. Obviously, since that time the very sad events have taken place that led to the partial destruction of Hampton Court. We were all grateful to the Secretary of State for his assurance that funds would be made available for the reconstruction of Hampton Court. I simply want to ask my hon. Friend the Minister to assure us that we will not have any barmy modern architectural practices forced on to the beautiful Hampton Court palace and that it will be rebuilt properly in a combination of mediaeval, Tudor and Wren. I know that many people in that part of London are worried at a suggestion from an architect whose name I cannot remember——
§ Mr. Jones
No, it was not my hon. Friend the Member for Chipping Barnet (Mr. Chapman). The architect suggested that the ruins should simply be glassed over as a monument to the destruction. That would be quite unacceptable.
I should like to refer briefly to Vote 3 referring to the Commission for the New Towns. It is the policy of the Government, one that I fully support, that assets of the Commission for the New Towns should be released into the private sector in order to allow funds to be made available for other capital projects. I think that there is some evidence that the commission is using that remit to try to extract outrageous sums on the non-trading side of the commission. I am not talking about the sale of factories and so on, but the sale of some of the social assets. For example, the centre for the blind in my own constituency is on a 99-year lease on a peppercorn rent. Therefore, it seems wholly unreasonable for the Commission for the New Towns to insist on market price if the trustees of the centre for the blind wish to purchase it. It has no value to the commission since it is on long lease with a peppercorn rent. I hope that my hon. Friend will look at that and other examples to see whether he could give revised instructions to the Commission for the New Towns to ensure that it has proper regard to the social obligations in constituencies such as mine, Welwyn, Hatfield, Stevenage, Crawley and other new towns where their own corporations have been wound up.
I have also worried considerably about the commission's attitude to the sports facilities that it owns. I must declare my interest, albeit it a non-pecuniary one, as president of the Dacorum sports council. We are worried that, as the commission owns some of our sports fields, it will be tempted to seek planning permission for housing development on that land to get the maximum capital gains for itself. That would not be consistent with the general policy that has existed in the area for many years, which is that we should try to have the maximum sporting facilities in the town.
252 Vote 6 deals with rate support grant which is always a contentious matter. My hon. Friend the Minister will be well aware that when we last debated RSG I did not support the Government in the Lobby because I felt that Hertfordshire was being particularly adversely treated. I do not wish to defend excesses in expenditure. It is striking that since the Conservative party lost control of the county council in 1985, the alliance, together with the Labour party, which together form the majority, have pushed through an increase in spending of 11 per cent. That is second only to Liberal-controlled Somerset as an increase in expenditure. My ratepayers and others in Hertfordshire are having to carry the can for that sort of excess.
My anxiety is that the RSG distribution is unfair. It seems fair to say that because my constituents and others are wealthier than average—our per capita income is about 10 per cent. greater than the national average—we should pay more. But the average ratepayer in Dacorum pays 41 per cent. more in rates than the national average, and that is unfair. That is because of the way in which rateable value is taken into account in distributing the money available. The sooner my hon. Friend presses on with the reforms that have been heralded in the rates Green Paper, the better it will be for areas such as mine.
§ Mr. Allan Roberts
Is the hon. Gentleman aware that the Green Paper envisages that the change to a poll tax will take the duration of five Parliaments? Does he really believe that the Government will do anything about it?
§ Mr. Jones
I sincerely hope that my hon. Friend the Minister will take note of the importance of having a community service charge, because that will be a much fairer way of distributing the cost of community services than the present rating system. I make no bones about the fact that I support that proposal. Indeed, I have said that vigorously in my constituency and received a large amount of mail from people who agree with my stand.
My point refers to the other half of the Green Paper, which deals with how RSG distribution would take place. I certainly welcome the division of RSG into two halves: a per capita half and a resources half. One anomaly in the present system, which I am sure my hon. Friend would not wish to get rid of, is the London discount. London is given a 25 per cent. discount on its rateable value because it is considered to be high. In all fairness, either that should apply to Hertfordshire, Surrey, Berkshire and other local authorities which surround London and also have high rateable values, or the London discount should be abolished. I leave it to my hon. Friend to decide which he thinks is fairer. Certainly it is most unfair that London enjoys a privilege that is not extended to other areas.
The hon. Member for Bootle made a most interesting speech on housing. Unfortunately, he did not go as far as we in the Conservative party might have liked as he did not let his cat entirely out of the hag. However, the front six whiskers of the cat were quite enough to frighten many of my constituents, who would find their mortage interest tax relief abolished because they pay higher rates of tax. I do not know whether the hon. Gentleman realises that a senior school teacher in my constituency married to a manual worker in one of the computer industries would easily fall into that bracket and would end up paying a great deal more in tax if the relief were altered.
The hon. Gentleman did not tell us — the Labour party must come clean on this—where the Labour party 253 would set the limit for tax relief. He said that it was reasonable that tax relief should be given on mortgage loans up to £12,000 but implied that it was wrong that it should apply to loans of £30,000. At which point between those two figures does the Labour party propose to cut relief? I have heard it said that £20,000 is the point at which the Labour party imagines tax relief should end. If so, many home owners in the south-east will be extremely hard hit.
Finally, housing is a changing area of public policy, and rightly so, because people's aspirations change. It is not many years since most people's expectation to rent gave way to an expectation, especially among young people, to own their home. I pay tribute to the Government for having liberated a large number of my constituents from their previous feelings that home ownership was not available to them. It is now.
If we are to progress on the housing policy front we need to see more local authorities following the example of Wandsworth, which is prepared to involve the private sector in work and to bring in capital from private development companies to produce much better houses in the areas where grim, awful, council estates previously stood. It is hardly surprising that the Conservative-controlled council there was triumphantly re-elected in May. It gives many people in Wandsworth a chance of something which every Opposition Member has — a home of their own. Because that is the rallying call of Conservatives in local and national government, I am pleased to be a supporter of the Government.
§ Mr. John Cartwright (Woolwich)
I must be the first hon. Member to speak who is not a member of the Select Committee. I should like to offer my congratulations and thanks to it for the way in which it has examined these Estimates. I propose to select three issues to which it has referred in its helpful report.
First, I turn to the issue of the home loans scheme. As has been pointed out, the scheme began life in 1978 as the home purchase assistance scheme, and since then it has been virtually ignored by the Government. The financial limits are exactly the same as when the scheme was first introduced. Applicants who have saved for two years qualify for an interest-free loan of £600 and a grant of £110. However, since 1978 house prices have more than doubled and the Nationwide building society's housing price index which stood at 172 for the fourth quarter of 1978 shot up to 377 by the first quarter of 1986. Yet throughout that period the figures for the home loans scheme have not been increased by one penny piece, nor has the scheme been promoted seriously by the Government. As a result, it is hardly suprising that the number of applicants has decreased to only 3,000 a year. Indeed, it is surprising that as many as that know that the scheme exists.
At present, as the finance director of the Department of the Environment admitted to the Select Committee:the repayment of loans exceeds the outgoings so there is a net income to the Exchequer from it.In other words, we have the crazy position in which a Government finance scheme, designed to put money into the pockets of first-time home buyers, has become a nice little earner for the Government. The sums involved are paltry. That was underlined in the Select Committee's examination by its Chairman, the hon. Member for 254 Hornsey and Wood Green (Sir H. Rossi), who pointed out that the Government were spending £2.8 million on the home loans scheme and £3.8 million on dog licences. As he pointed out, if the Government scrapped dog licences, they could double the much needed help to first-time buyers.
The home loans scheme was designed to help genuine first-time buyers on modest incomes. People who already have a foot on the ladder, who have some inherited money or whose parents are prepared to give or lend the money for a deposit do not need such help. If the Government are as committed as they say that they are to extending home ownership, they must do more to help those young people struggling to pay rent or living with their parents while trying to save money to buy their first home. The scheme needs to be revamped. It should be limited to those on modest incomes, average earnings or below, who are saving to buy their own homes.
Rather than continue with the present arrangement of a loan grant, we should return to the original idea of matching grants so that the amount that people save will be matched pound for pound over a period of at least two years and up to a reasonable maximum figure. If the scheme were properly promoted and advertised, it could give a real incentive to young people to own their own homes. Much more important, it would bring home ownership within the reach of many young couples who are now denied it.
I move from a scheme about which little is known to an issue about which all too much is known — the condition of local council housing stock. Last November, the Department of the Environment published its famous report on the extent of dilapidation in local council housing. In summary, the report said that 3.836,000 dwellings, 84 per cent. of the council housing stock, were considered to require expenditure totalling £18.84 billion, at an average cost of £4,900 per dwelling. The estimate For local authority capital expenditure on renovation in 1985–86 was £1,150 million. That is only 6 per cent. of the money that needs to be spent, assuming that there is no further deterioration.
We all know that the condition of the housing stock is getting worse all the time. In its April 1985 report on capital expenditure controls in local government in England, the Audit Commission pointed out:the total maintenance backlog will have been building up at the rate of at least £900 million a year at 1984 prices over the past several years".That implies that our current level of spending for repairs in council housing has an impact of only around £250 million a year in improving the situation. In other words, the overall bill for housing repairs in the council sector may be coming down by as little as 1 per cent. a year. On present trends, this could mean that it will take us up to the end of the next century to bring all council housing up to acceptable standards.
Obviously, all these Estimates have a certain broad ball park element to them. We know that the Department of the Environment is conducting selective follow-up surveys to the 1985 exercise, and that in 1986 the housing condition survey will give us more accurate information about the state of the public sector and its housing. A clearer view of the trend to deterioration on the one hand and the counter trend in terms of maintenance and repairs on the other will be emerging over the next few years.
255 The underlying problem is clear, whatever the precise figures. The Select Committee said clearly and firmly in its report:Neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on. Some property, particularly in the public sector, may be near the point where replacement rather than renovation becomes the only realistic but much more expensive option. Accurate information is important but the necessary decisions are urgent and should not be postponed while the proposed House Condition Survey follows its protracted course.I strongly endorse the sense of urgency contained in that recommendation.
Those of us who represent a substantial number of council tenants know only too well what this past neglect means for council tenants and families. It means leaking roofs, decaying plaster, rotting window frames, flats running with damp and condensation, old fashioned, ineffective and expensive heating systems and all the rest that so reduces the quality of life for many families in council housing.
There is a wide agreement across the House that the Government have not given capital expenditure the priority that it deserves. Capital spending on housing has been cut by 60 per cent. since the Government came to power and we know that there are no plans to increase the amount being spent on housing. Even last year, when the then Secretary of State was reported to have won a famous victory in the annual public spending round, it turned out that the increase of £250 million for housing spending was a decrease of £185 million. This was a confidence trick achieved by creative accounting and a revision of the amount of capital receipts that local authorities were allowed to spend. If that was the scale of the victory achieved by a leading Cabinet wet, it is doubtful how much faith one can put in a Secretary of State who is reported as having started the annual spending round by reducing the figures for his Department.
There is a general view that we must put greater emphasis on capital spending and increase investment in our national infrastructure. In 1970, we spent 7 per cent. of our national product on public investment. Today, the figure is down to only 2 per cent. We must, at the very least, restore the share of capital spending to its 1979 level. That means a boost of about £2 billion to be concentrated on housing and roads.
Public expenditure is not enough. The Government hope to attract private finance into the local authority sector to assist in tackling a tremendous backlog of maintenance. In principle, I welcome that approach, but it has to be based on a genuine partnership between local authorities, financial institutions, developers, tenants and the local communities involved. It is not clear at this stage whether the Government have found the right mix, and it is doubtful whether a genuine impact can be made without both an increase in Government spending and significant incentives to encourage private investors to put their money into the restoration of council houses.
The Audit Commission pointed out that, although about £1 billion might be available to invest in council housing, the response in the local authorities has beenunderwhelming to say the least.The Audit Commission contrasts that lacklustre approach with the experience of north America where in cities such as Atlanta, Baltimore, Cleveland, Detroit, Minneapolis, 256 New York and even Washington DC there has been clear evidence that only with a productive partnership between public and private sectors can the problems of inner cities in particular be addressed. In its report of March 1986, the Audit Commission set out a number of ways in which public-private partnerships can be developed. I hope that the Government and the local authorities will examine these proposals further and produce capital initiatives before much longer.
The hon. Member for Hertfordshire, West (Mr. Jones) mentioned briefly the next issue on which I shall talk—caravan sites, gipsies and the travellers. I notice that the Select Committee recommended last year that the time was ripe for what it called a "modest review" of the effectiveness of Government policy. As a result, a consultative document was issued by the Department of the Environment in March this year.
On the basis of my experience in my constituency over the past 11 years, I cannot believe that the present policy is effective. In 1971, my authority of Greenwich provided a site for 54 travellers, gipsies and their caravans because we had a traditional involvement with such travellers and we thought that it was right to provide such sites. It is much larger than the sites required by the Caravan Sites Act, and cost us more than £300,000 to provide. We had only occasional problems.
Once the Thamesmead area was opened up for development, we were subject to regular invasions of caravans. There were difficulties when the landowners or the borough council used their powers under the Caravan Sites Act to take cases to court. We all know that the court procedure is slow, cumbersome and only moves the problem from one place to another. That was difficult enough until we had a change of political attitudes on the part of the GLC and the London borough of Greenwich in 1982. They declined to take any action to remove caravans in the area unless a severe problem had resulted.
As one can imagine, the caravans are now no longer part of the problem in the Thamesmead area but a permanent feature of life there. This morning, I counted and found that Thamesmead is disfigured by more than 70 caravans, mainly along the main road. My constituents have to put up with the rubbish and the filth created by some travellers, although not all. In particular, those who indulge in metal breaking, site clearance and encouraging others to tip in the areas near their caravans are causing a problem. There is also the problem of the horses that roam wild around people's homes and gardens and even into school areas. On occasion they have caused serious accidents through running free on main roads.
The Greenwich council has now proposed a second travellers' site in Thamesmead for up to 60 caravans. It is less than a mile from the original site. I cannot accept that that is either fair or reasonable. We have to share the burden of responsibility within one borough across other boroughs as well. I accept that we have to make reasonable provision for those who have a travelling lifestyle and who need to move around the area, but I believe that we must also show consideration for working people who pay substantial sums of money in rent, rates and mortgage repayments. They bitterly resent the creation of shanty towns around their homes and throughout their communities.
Therefore, like the Select Committee, I look forward to hearing the outcome of the Government"s deliberations as a result of the consultation document on travellers and 257 their caravans. I hope that at long last, after all these years, there will be effective action to deal with a problem that has been allowed to drag on for far too long.
§ Mr. John Mark Taylor (Solihull)
This will necessarily be a brief intervention, but I should like to follow the hon. Member for Bootle (Mr. Roberts) and my hon. Friend the Member for Hertfordshire, West (Mr. Jones), both of whom are fellow members of the Select Committee on the Environment, in expressing appreciation of the excellent lead of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) on the Select Committee. The more obvious dividend that he collects — and collects again on our behalf as Members of the Select Committee on the Environment — is the way in which he has succeeded in persuading the managers of the business of the House of the importance of Select Committee reports so that they are debated here from time to time. My hon. Friend's record in that regard probably exceeds that of any other Select Committee.
§ Mr. Allan Roberts
On that point, perhaps the hon. Gentleman will ask the Minister to tell us when we may expect a response to the remainder of the Select Committee's report, on the disposal of nuclear waste.
§ Mr. Taylor
That is an interesting point. The hon. Gentleman will not be short of techniques with which to advance his sense of urgency about the report, and I am quite sure that he will do so.
The hon. Member for Woolwich (Mr. Cartwright) referred to the north American experience and to some of their major urban problems. Many of them have close parallels with those that we face in our main conurbations. His mention of Baltimore aroused my interest, because it was the pioneer city of homesteading—that most daring of privatisation measures. Homesteading means gathering together the title deeds and handing them over to the young, first-time house purchasing couple for, in many cases, a dollar, in return for a covenant to repair a property that, sadly, has fallen into disrepair. It is a very interesting experiment which we should examine further.
As repair is the theme of the moment, it surprises me that it should he necessary to say again in this Chamber that the curve which it is possible to plot or draw—the graph between deterioration and cost—is not linear and never was linear. Our grandmothers told us that a stitch in time saves nine, and all modern analysis and modern science have led us to precisely the same conclusion: that delayed repair is exponentially expensive. One of the more worrying features that emerges from the environmental studies is that we are too complacent in our repair programmes and repair policies.
I think that it would be right to echo the words of other right hon. and hon. Members in the debate. They returned again, in surprise, to our national governmental practice of annual regimes of Government accounting. The local government experience of many right hon. and hon. Members taught them the difference between the discipline of the capital account on the one hand and the revenue account on the other. All branches of the accountancy profession are absolutely wedded to these principles, yet in our nation's affairs at the highest level we subject ourselves to the kind of financial scrutiny that would be unacceptable to the humblest district auditor.
258 This is not merely disturbing to me but, as we have heard, it leads to some perverse consequences. It is not just a bizarre way of presenting the accounts on a kind of national receipts and payments basis. It is not just eccentric in that sense. It is actually harmful. It is because of these accounting principles that the Property Services Agency, for example, was faced with what has turned out to be a complete disincentive to enfranchise leases, when other speakers have already said that enfranchising leases would make sense from so many points of view. The accounting technique has, for all practical purposes, prevented what would otherwise be a common-sense policy.
In drawing my remarks to a close, I hope that the hon. Member for Bootle will not mind if I remind him that those with the largest mortgages are very often those who put down the smallest deposits. At that time in their career as property owners, they may be able to put down only a small deposit. I refer to those who buy their first house with a mortgage of 95 per cent. and, in some cases, even more. In my division of Solihull many constituents are buying properties for, shall we say, £32,000. They are just moving over the stamp duty threshold and they are doing so with mortgages of, say, £30,000. I should not want them for a moment to think that the Opposition consider that they are affluent members of society and that they should therefore suffer not only the punishment and penalty of stamp duty but also the erosion of the income tax relief that they have been led to expect. The first-time home buyer is often at the point of maximum borrowing and minimum personal input.
When Select Committee reports are reviewed, many criticisms are voiced, but I end with a compliment to the Property Services Agency. Not long ago I went to see the Cabinet war rooms, a public presentation that both right hon. and hon. Members and tourists are able to visit. That job has been very well done.
§ Mr. Tom Clarke (Monklands, West)
I hope that the Under-Secretary of State for the Environment will not take it amiss if it is impossible for me to hear the whole of his wind-up speech, but I have other duties in the House. However, I promise that I shall read his remarks very closely—all the more so, because I hope that he will respond to some of the points that I am about to make.
I address my remarks to class XX, vote 18, of the Supply Estimates that are being considered by the House. I welcome the debate, and particularly the clear pledge by the hon. Member for Hornsey and Wood Green (Sir H. Rossi) that his Committee will conduct a searching inquiry into these matters. I was delighted to hear him give that pledge. I hope that if he has an opportunity to study my remarks, he will feel that the Coatbridge south circular road project is a matter that his Committee ought to consider with extreme urgency.
The subject does not come as a surprise to the Minister. He was present, and indeed he replied, when I initiated it in an Adjournment debate on 25 March, almost three months ago. I am astonished that all that time has passed and my constituency still has such a serious problem. We still make profound criticisms of the method of budgeting and the preparation of estimates by the Property Services Agency. Those criticisms were echoed in general terms by almost every hon. Member who has taken part in the 259 debate. In the light of those criticisms, I should have expected a decision by the PSA about the Coatbridge south circular road project. I should certainly have expected the Minister and his right hon. and learned Friend the Secretary of State for Scotland to have taken some action by now.
The Minister will be aware that I am referring to the office replacement and the new office provision of the Department of Employment and DHSS offices in Coatbridge. During the Adjournment debate on 25 March, the hon. Gentleman described the offices asnot quite Victorian but very old."—[Official Report, 25 March 1986; Vol. 94, c. 925.]That hardly describes, in graphic detail, the appalling conditions which exist in both offices. The Minister does not dispute that. He knows that inspectors from the various departments have commented on the conditions which exist. He accepts—I give him full credit for it—that the case for replacing the two offices in my constituency is unanswerable.
Class XX, vote 18, of the Estimates makes no reference to the money which the Minister promised my constituents a long time ago. Perhaps he will put the record straight tonight. As the Minister knows—he has been in touch with the Department of Employment — unemployment in my constituency is about 22 per cent. Those offices would serve the village of Gartcosh—the House knows a great deal about the problems of Gartcosh — which has an unemployment rate of over 30 per cent.
I shall not bore the House with the facts that I put on record during the Adjournment debate. However, I am entitled to remind the House of the promise that the Minister gave in a letter he sent to me in December 1984. I should have expected the money that he promised my constituents to be included in the Estimates or in the Estimates which were last published.
The Minister's letter of December 1984 stated:The delay over several years in providing a new office at Coatbridge for DE and DHSS has been a result of other pressures on the Property Services Agency's Office and General Accommodation programme. These pressures will continue in the foreseeable future, but the deterioration in the condition of the existing accommodation is I know becoming very severe.I remind the House that the letter was dated December 1984. The Minister continued:and I recognise also that a decision now to relocate both Departments to the South Circular Road site could make a valuable contribution to the redevelopment of the area.As the Minister also responsible for the inner cities, I believe it vital that Departments including PSA should bear in mind the importance of urban regeneration when determining their own programmes. I am pleased therefore to confirm that, despite the tightness of funds, I have now authorised PSA to enter into a commitment for construction of new offices for DE and DHSS at the South Circular Road site which we will purchase on completion in 1986/87.Time has passed. A start has not even been made on the construction. The Minister had to write to me again on 5 March 1986. He wrote to me again, after all that time had passed and after the commitment and involvement of the Scottish Development Agency, the local authorities, Monklands district council, Strathclyde regional, British Telecom and everyone else who was interested in clearing the site and preparing it for the offices. All that was based on the hopes that the Minister gave to my constituents in the letter he sent to me in December 1984.
260 The Minister's letter dated 5 March 1986 stated:It was because I could not allow a contractual commitment to be entered into without funds being earmarked that I had to hold the project up at the last minute. I realise how disappointing this is for all concerned; and I can assure you that I am actively pursuing a solution with my ministerial colleagues in the hope that a new building can go ahead shortly. But at this point. I can do no more than promise to search for funds.Perhaps the search is continuing. However, there is very little evidence that that is so. The Minister's letter of 5 March came, as he rightly said, as a considerable blow to everybody concerned, not least the staff of the Department and those who frequent both offices who have found that their privacy was not being respected.
The Minister is well aware that the Scottish Development Agency and those involved in the project have already spent about £600,000 on clearing the site so that the building can go ahead. The Minister may argue yet again, after a three-month gap, that the project has not been cancelled; it has been postponed. If he does so, I must remind him that postponements cost money. We estimate that the postponement is costing the taxpayers £450 a day. In the Adjournment debate, the Minister said that Monklands district council had engaged Males and McDonald as its consultants and they would carry out their duties in that capacity. Those consultants were engaged by the PSA. The PSA should accept the responsibility. The PSA should urge upon the Minister the need to reach a solution to the problem.
Because the Minister has said, time after time, that he is actively pursuing the matter, I should have thought that a conclusion would have been reached by now. The Minister said that he was looking for a solution as soon as practicable. I should not have thought it would take three months from the debate on 25 March. I have heard disturbing rumours that the money that might have been allocated to the project may go to a new town somewhere in the United Kingdom, and possibly to a computer project. If such a provision is included in the Estimates, it would be a massive insult to the people of the west central belt of Scotland and especially my consituency. i invite the Minister to clarify the position.
The PSA has been criticised for the fact that, when there is a change of specification, it does not seem to be as alert to the consequences as it should be. That certainly applies in this case. The PSA encouraged the planning for a two-storey building instead of the previous ideas. The PSA must accept the consequences. The PSA cannot argue that that has caused a delay and increased the price. Of course it has, but the PSA should have the experience and knowledge to judge the consequences of its decisions.
I am appalled at the PSA's activities in Scotland, and I am not alone in that view. I am appalled that the promises made when Gartcosh was closed have not been fulfilled. In March this year, the Secretary of State for Scotland said that the Government would do as much as they could to help because of the substantial losses in the steel industry in Lanarkshire. Those views were expressed publicly also by the chairman of the Conservative party and many others.
There have been even more job losses, but what sticks in our gullet is that they have occurred because the Government have failed to co-ordinate appropriately and significantly with the PSA. I am sorry to say that the Under-Secretary of State has not yet lived up to his word to me. I urge the hon. Gentleman and the House to ensure 261 that there is greater scrutiny of the PSA's estimates. I say that based on the experience in my constituency. If that experience means anything, the PSA, and therefore the Department of the Environment, should come under the greatest possible scrutiny. I hope that the Under-Secretary of State will address himself with greater urgency to this serious problem.
§ 9 pm
§ Mr. David Winnick (Walsall, North)
Reading the chapter on housing in the Supply Estimates would not make one realise that a formidable housing crisis exists. There is a passing reference to enabling local authorities and housing associations to provide new homes for those whose needs cannot be met in the private sector, but that is not being done. It is deliberate Government policy that local authorities should not have the financial power and resources to build new dwellings to rent.
I remind the Under-Secretary of State, as I have done previously, that the reduction in housing public expenditure since the Conservative party came to office in 1979 is more than 60 per cent. in real terms. The number of new council dwellings being constructed is the lowest ever in peace time. It has been fairly low in recent years hut, this year, the number of new public sector starts will be almost certainly less than 30,000 and, quite likely, well below that figure.
This has resulted, as one would expect, in an acute shortage of local authority housing. Waiting lists have grown substantially. Hundreds of thousands of people know that they stand no chance of obtaining a mortgage, and will not benefit from any scheme which has been introduced by the Government. They cannot be rehoused by the local housing authority, in the main through no fault of the council. That, as I have stated, has been deliberate Government policy.
The Chairman of the Environment Committee referred to the needs of special groups in the community for council dwellings. I pointed out that many people—obviously those on below-average incomes, as well as many others —are not in a position to obtain a mortgage. Imagine a person with no substantial savings who earns less than the average income and is trying to buy a place in Greater London at current house prices. To some extent, that problem occurs in other parts of the country as well.
This explains why local authorities are spending £1 million a month on bed-arid-breakfast accommodation. Research has shown that, for a couple with two children, the saving in providing new council accommodation rather than putting them in bed-and-breakfast accommodation would be between £7,000 and £10,000 a year. Is it not disgraceful that so many people, including couples with children, are now in bed-and-breakfast accommodation? What will the Government do about the problem? What additional assistance, if any, will they give local authorities so that it is not necessary to place families in that unsatisfactory accommodation?
The report from the Environment Committee notes concern about the state of repair of the existing housing sector. Wisely, they point out that neglected maintenance is not merely postponed but gives rise to the need for even more maintenance later on. It is a very telling point and one would hope that the Government take it on board.
The Committee cross-examined witnesses from the Department of the Environment. Some £19 billion is 262 needed for all the necessary work to be undertaken. That figure was not disputed by the civil servants who gave evidence before the Environment Committee.
Last week, in a speech that was amazing even by the standards of this Government, the Minister for Information Technology stated that councils were demanding extra billions for repairing and modernising council housing. He complained about that. He said that the claims were exaggerated and were designed to curry favour with the unions. He condemned demands for extra spending by his ministerial colleagues as electoral bribes. In his warped view, he said that council housing breeds slums, delinquency, vandalism and waste. What a truly disgraceful and ignorant attack by a Minister of the Crown upon the millions of residents who live in council dwellings. That Minister showed himself to be utterly unfit to hold public office.
It is of some interest that so far not one of his ministerial colleagues has come to his defence, including the Prime Minister. I immediately tabled a question to the Prime Minister, as one would expect an hon. Member to do. I asked her if her hon. Friend's speech last Monday week reflected Government policy. 'The Prime Minister gave some sort of justification for the Government's housing policy, but she never mentioned the Minister or his speech. I do not know whether that was considered to be some repudiation of his remarks.
It is likely that the comments of that Minister reflect to an extent the prejudices and dislikes of public sector housing that some of his colleagues, including some in the Cabinet, may have. Clearly, if that is the position those Ministers will not say anything in public. I should not be at all surprised if the general feeling in the Government is that that Minister opened his mouth too wide. It has been said that the speech was supposed to give him some prominence, that he was fed up with being obscure, that perhaps it was a hid for promotion. The next time that there is a Government reshuffle, we shall see whether his gamble has worked.
Undoubtedly, up and down the country, there are estates that the Environment Committee commented on which need to be modernised, improved and repaired as quickly as possible. I make no apology for returning to the subject of an estate in my constituency. I have mentioned it before. It causes me a great deal of anxiety, but even greater anxiety is caused to the tenants who have to live on that pre-war estate.
These houses, as I believe the Minister should know by now, were built between 1934 and 1938. They are desperately in need of modernisation. They lack modern facilities and in many cases there are no indoor toilets. The kitchens are unplastered. Hand basins have not been provided over the years. The estate is urgently in need of modernisation.
The fault certainly does not lie with the tenants. No one in his right mind would suggest that tenants are responsible for a pre-war estate getting into its present condition, where the minimum of work has been carried out over the years. Of course, the work should have been done some time ago. Walsall metropolitian borough council has been keen for the estate to be modernised, but the housing investment programme allocation in recent years has been insufficient for the work to he carried out.
Last July I took a deputation from the residents' association to see civil servants at the Department, as no Minister was willing to see us. In the following month, the 263 senior official at the west midlands regional level went round the estate and saw the amount of work that needs to be done. More recently, negotiations have taken place between the council and the Government's urban housing renewal unit over funds. The unit has undoubtedly been trying to pressurise the council to sell some land and properties on the Rosehill estate to the private sector. The local authority has made it clear that it is not in favour of any such sale. There have been several meetings of residents and the tenants have also made it clear that they are not in favour of any land or houses being sold to the private sector. I should point out that this has nothing to do with selling to existing tenants.
In a written answer on 9 June the Under-Secretary of State who is to reply to this debate said that although the unit encouraged local authorities to take full advantage of obtaining private sector contributionsThere are no rigid preconditions for schemes supported by the urban housing renewal unit".—[Official Report, 9 June 1986; Vol. 99, c. 22.]The Under-Secretary is nodding. If that is the position, the local authority should not be under such pressure to sell off the land and houses in order to obtain the extra funds that are so necessary if work is to begin at the end of the summer.
It is essential that the Rosehill estate should be modernised. Indeed, I shall continue to table questions about it, because the funds should be made available and the work should begin at least by the end of the summer.
The Government have a deplorable housing record. People are increasingly coming to understand the need for more money to be spent on housing, as well as on the Health Service and education. Last night I was upstairs watching "Panorama". In the main it interviewed Tory voters, or at least those who had voted Tory. Several of them, I believe, were members of the Conservative party. It was clear that if there is a choice next Budget time between a cut in taxation and more public expenditure, they want more public expenditure. They are absolutely right, because that makes sense.
The Health Service, education and housing are desperately in need of more funding. Those interviewed last night were mostly owner-occupiers, just like most—if not all — Members of Parliament. But, unlike Ministers, they understand that those who do not have the means to become owner-occupiers still have a right to proper and adequate accommodation. That accommodation is only likely to be provided by local authorities and genuine housing associations. Incidentally, we should not forget how housing associations have also had their funds undermined during the past few years.
The previous debate involved employment issues. If local authorities had the finances necessary to build and modernise houses, many of those who are unemployed would be able to earn a living. It is estimated that roughly 25 per cent. of all those involved in the construction industry are currently unemployed. Would it not be sensible for those people to earn their living and provide the dwellings that are so urgently needed? However, we do not expect any sense from this Government.
We have been told that there will be no major changes in Rent Act regulations during the lifetime of this Parliament. However, we have not been told what changes might occur if the Government are re-elected. 264 The Minister has a duty, before the next general election, to explain to the country what will happen if the Government are re-elected. Will the present regulations be abolished? Will there be a position similar to that under the Rent Act 1957 when all newly rented accommodation on the market was decontrolled, with no security for tenants and no ceiling to rents? The country will want to know that. It is no good Ministers trying to keep it a secret. I do not believe that the Government have any chance of being re-elected, but the Opposition, at every possible opportunity, will press the Government about what changes they intend to make if they are re-elected.
I have raised matters of great importance to many people. I mentioned the speech last week by the Minister for Information Technology. It is wrong for the Government to continue on a path that means that so many people are denied adequate housing. It is right and proper that Opposition Members use every opportunity, such as that presented tonight, to explain what is happening, to put their case and to try to get Ministers to understand how important it is that people should be properly housed.
§ Mr. Jack Straw (Blackburn)
I commend the speeches of my hon. Friends the Members for Bootle (Mr. Roberts), for Monklands, West (Mr. Clarke) and for Walsall, North (Mr. Winnick). My hon. Friend the Member for Walsall, North reminded the House of the speech last week by the Minister for Information Technology, who made offensive and insulting remarks about those living on council estates. His description of them is something unknown to us. My hon. Friends and I know a little about living on council estates, where most of us spent our childhood. The Minister's description of delinquent vandals is something that we would not expect, even from Conservative Members.
My hon. Friend also raised the question of the Government's policy towards the Rent Acts. Ministers have said that there will be no major legislation before the next election, but that is because they have electoral cold feet. We want to know what conclusions were reached in the major review of the private rented sector that was carried out within the Department of the Environment last year. When will the results be published so that the House and the public can judge whether it would be right to embark once again on a major decontrol of the private rented sector?
Taken together, the Estimates of the Department of the Environment and the PSA under classes IX, X and XX amount to £13,035 million, which on any basis is a great deal of money. The principal function of the House is to order and superintend Supply to the Crown. That difficult task is made more difficult given the magnitude of the figures with which we are dealing.
I would like to begin by commending the hon. Members for Hornsey and Wood Green (Sir Hugh Rossi) and his colleagues, including my hon. Friend the Member for Burnley (Mr. Pike), my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and my hon. Friend the Member for Bootle for their work on the Select Committee on the Environment and for the excellent and perceptive reports they have produced. The reports emphasised much of the unsung work of the Select 265 Committee. They are a testament to the initiative taken by the right hon. Member for Chelmsford (Mr. St. John-Stevas) in the reforms that he introduced in 1979.
In both reports, the Select Committee has secured a fine balance in the subjects upon which it focused. There is always a tendency for council committees, and perhaps also for Select Committees, to favour the small, understandable items rather than the large, more important but less comprehensible items. I am sure that we can all tell stories of the millions of pounds worth of expenditure shooting through council committees while there were major arguments over the expenditure of £100 on the mayor's chain or a gown for the mayor's attendant.
In my judgment, the Select Committee was right to focus on one or two relatively small issues as sometimes, by small example, bigger issues are raised. Although the total expenditure on dog licences is, in the vast sweep of Government public spending, a mere drop, none the less the heat that the issue can generate is disproportionate to the expenditure and it is right that we should consider it.
I can see my hon. Friend the Member for Burnley smiling. Those of us who are acquainted with north-east Lancashire have burned on our souls the fact that the Labour party in that area went down a wrong turning over the control of dogs in parks and almost came to grief. When I was a member of Islington council, i learnt an early lesson in the art of the possible. When I was chairman of the housing, management and maintenance committee of that worthy council, we were urged by a group of tenants on an especially difficult block estate to enforce the conditions of tenancy which stated that there should be no dogs. We set about enforcing those conditions and we were quickly down the road that led us to conclude that the only way to enforce these rules was to evict the tenants. We finally decided that some things were impossible to implement, no matter how desirable, and we were forced to back off.
§ Mr. Peter Pike (Burnley)
My hon. Friend referred to the experience of Burnley council and the difficulties that arose over a dog ban in an small section of the parks in the borough council. I hope that my hon. Friend will stress to the House the difficulties of this kind of issue. Will he stress that whatever is done ultimately over the future of dog licences—whether there he an increase in the fee or an abolition of' it—it is most important that action is taken nationally rather than that it should be left to the local level, where the aggravation caused will be out of all proportion to the implications of the case?
§ Mr. Straw
I share my hon. Friend's view from the experience in Burnley and from that experience burned on my soul while I served on Islington council.
This issue arouses an enormous amount of heat. As a parent, I am deeply concerned about the state of the parks in which my children have to play. Although I am not a consensus politician, I can offer the Minister the chance of all-party agreement on the issue of the control of dogs. This is generosity indeed. This issue can only be solved if it does not become one upon which hon. Members base party political affiliation. It easily could be such a case if it is not handled properly.
§ Sir Hugh Rossi
Will the hon. Gentleman spell out exactly what his offer is? His comments are very intriguing. His colleague, the hon. Member for Burnley (Mr. Pike), suggested that the issue should he dealt with not at local 266 level but at national level—that the Government should take the stick for any unpopularity that results. I would be interested to know whether the Labour party is now suggesting that it is prepared to implement the working party report recommendations that were sent to the previous Labour Government upon which no action was taken for many years.
§ Mr. Straw
My offer is to sit down with the Government, if they wish to do that, to see whether there is a way in which we can reach agreement. It is extremely difficult for any Government to act because they are scared of the political repercussions. The matter should not be a subject of the party political divide.
Before I was diverted, I was saying that the Select Committee has identified some areas of relatively small expenditure which are none the less important and that it was right to focus on some areas of major expenditure, especially housing maintenance and the home loan scheme, on which many millions are spent at the moment and on which many millions more will have to be spent in the future.
My hon. Friend the Member for Bootle covered the housing issues in great detail and with great eloquence. Class X amounts to £10.125 billion, of which £9.246 billion is devoted to rate support grant for England. The legend at the top of class X, vote 6, says that the vote is a cash limit. Whatever other decisions we would make about the level of rate support grant, we shall keep it cash-limited.
The vote is cash. Unlike the discussion of funny numbers in the public expenditure White Paper, we are here discussing cash which is being paid in aggregate to local authorities. We are not discussing the much more difficult figures in the public expenditure White Paper concerning overall local authority spending— that paid for by rates and that paid for by the Government. During the past three years, we have repeatedly argued that it would be far better for the Government to focus on what they contribute to local authorities rather than to try, through the public expenditure White Paper mechanism, to control that which they cannot truly control— total local authority expenditure. We have challenged Ministers to deny that, in the context of the things that they say that they worry about, such as the money supply and the public sector borrowing requirement, local authorities' current expenditure out of the rates cannot affect the major monetary aggregates because local authorities cannot borrow long-term to finance current expenditure.
The then Secretary of State dismissed such arguments when the Rates Act 1984 was going through Parliament. I am pleased to see that some Ministers accept that there is a good deal of validity in what we have said. The previous Secretary of State—now the Secretary of State for Education and Science—is reported as having said that he accepts in broad terms the case that we are making. The Financial Times reported on 27 May that even Treasury Ministers now accept a case such as we have made. As this is a large sum of money, I should be interested to have the Minister's views on the relationship between the Government and local government.
Perhaps the Minister would also like to say something about class X, vote 8, on rate rebates. At the moment, people on the lowest incomes receive a 100 per cent. rebate. In the Social Security Bill, which is now in another place, the Government are trying to ensure that, regardless of a person's poverty, everybody should have to pay at least 20 267 per cent. of their rates and, in future, 20 per cent. of their poll tax. The Government were defeated last night in another place. There has been a suggestion on the tapes that the Government will overturn that decision. Also on the tapes are the sage words of an hon. Member who is on the wet wing of the Conservative party, like the Under-Secretary of State—the hon. Member for Brentford and Ongar (Mr. McCrindle). I hope that the Government will follow his wise counsel and accept the defeat in the Lords. If they do, they will be doing themselves at least an electoral favour.
I should like to raise with the Minister the comment in the report of the Select Committee of the Environment about the administrative costs of the London Docklands development corporation. This is supposed to be the jewel in the crown of the Government. It is certainly true that the LDDC can spend money as if there were no tomorrow —if one judges by the quality of the paper on which its PR documents are printed. It is an intriguing comment and I should like to hear the Minister's view on it. The comment appears at paragraph 3 in the report.
I should like to turn to the Property Services Agency which is class XX, vote 18. I shall deal first with one specific item before turning to the wider issues that are raised in the report about the property repayments system, dispersal, and the issue of rentals. The specific issue is about the proposals, as part of a major reorganisation, to close the area offices of the PSA at York, Leeds and Newcastle and to concentrate the work at the Leeds regional headquarters. This has caused a great deal of worry to the PSA staff in York. The staff side has been in direct correspondence with me and so has the Labour parliamentary candidate for York, Mr. Hugh Bayley, who has pursued the matter with great vigour with my colleagues and with me.
The PSA staff side and Mr. Bayley made two comments. First, they say that the proposal would lead to the loss of 60 jobs in York and possibly up to 20 redundancies. Secondly, they say it would lead to a substantial net loss to the PSA, and that it would not save money and there would be no increase in efficiency. The loss of jobs may be small when compared to the millions of people who have lost their jobs in the last six years, but it is serious. There is no point in saying that some of the people who lose their jobs will find jobs in Leeds, because those jobs will be lost to York.
I shall be happy to give the Minister the figures that I have been given about cost savings and outgoings. The figures were drawn up by the staff side and they suggest that on capital costs there will be savings of £300,000 and an outlay of £2.27 million. Therefore, there is a much greater capital outlay than there is savings. On running costs, there will be a saving of £380,000 and an outlay of £2.4 million. I hope that the Minister will give us far more details than he has given the House up to now about the kind of savings that are likely to be achieved.
I suspect that this exercise is part of some empire-building reorganisation and not part of a sensible proposal simply to reorganise the PSA. Insult is added to injury in York because I think it is acknowledged by senior officials, including I am told Mr. Geoffrey Chipperfield, at a meeting between him and the full-time officers of the union that the York PSA office is good and cost-effective. If that is the case, why should this reorganisation go ahead?
268 The hon. Member for Hornsey and Wood Green spoke of the rental policy of Government buildings. The subject is also raised in the report. Of the total of £994 million, some £225 million of the PSA vote is spent on rates. It is the largest single item. Three issues are raised here. The first is the method of charging under the property repayment system. The idea seems to be to charge Departments for the cost of the accommodation they use. That is a sensible idea, and one which encourages financial stringency. According to paragraph 8 of the Select Committee report, the discipline is a crude one because Departments are charged a standard rate whatever the accommodation they occupy. In other words, they are charged at a notional rate.
If the discipline is to work, it is essential that a Department should be charged for the cost of the accommodation that it occupies. There is plainly a difference between the cost of accommodation in Westminster and that, for example, in my constituency. The Committee is right to say that if Departments are charged only notional rents, it becomes a vast paper exercise with no benefits.
The second issue that is touched upon by the Select Committee's report is the dispersal of Civil Service jobs from London to the north. If Departments were charged, office by office, the economic cost of the actual rent of the accommodation would give natural encouragement through the mechanism of the market, to which Conservative Members are more attached than we are, to disperse jobs and accommodation from central London.
One reason why, as far as one can judge, there will be no savings in transferring the York office to Leeds is that rent levels are roughly the same. In fact, I think that they are rather less in York than in Leeds. But there are enormous differences in the cost of accommodation in central London and the north of England, as the excellent report from Debenham Tewson and Chinnocks has made clear.
§ Mr. Robert B. Jones
Perhaps more relevant is the fact that there is a considerable difference between renting a high street site and one that is slightly further from the centre of a town or city. I had hoped that minds would be concentrated on relocating offices to a place to which people would find it easier to travel and where parking might be easier as well as cheaper.
§ Mr. Straw
That is also true. Indeed, the report makes it clear that it is a lot cheaper to site across the river in London, even given rate levels, than it is to site this side of the river.
Let me give the combined rent and rate figures so that we are dealing with the total cost of accommodation which are provided in the report. In Westminster the cost is £35.20 per sq ft and in Lambeth £21.25, compared with Manchester which is £9.85, Sheffield £9.15 and Newcastle £8.70 a sq ft. There are enormous savings to be had if it is possible to locate staff outside London.
I do not underestimate the problems of dispersal. Some jobs have to be in central London. This is the capital city and the seat of government. But there is scope to do much more and it is tragic that the dispersal policies were abandoned by the Government in 1979. I hope that we shall hear from the Minister that the Government are now seriously looking at the possibility of changing that policy.
My last point is on the distinction between renting and buying that is made in the report. The point was well made 269 by the Chairman of the Select Committee. I say only that millions of pounds are being wasted by the fact that the PSA and the Department are trapped by a ludicrous Treasury convention. There is no good reason whatever for preventing the PSA from buying freeholds and every reason for establishing new conventions—that is all they are: there is nothing God-given about them—of the kind that any other company or decent public institution would follow so that capital is accounted for in a different way. I hope that we shall hear more from the Minister now than has been hinted at in the report.
The Estimates are important. I commend the work of the Committee and I look forward to the Minister's reply.
§ The Parliamentary Under-Secretary of State for the Environment (Sir George Young)
The debate has covered a wide range of issues across my Department and the PSA. I shall try to cover most of the points that hon. Members have made, focusing particularly on the recommendations of the Select Committee's report. If I do not cover all the points, I shall write to the hon. Members concerned.
I join in the tribute paid to my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), the Chairman of the Select Committee. The House and the Department are lucky to have an expert Committee with a skilled Chairman. As a former senior Minister he knows what questions to ask and where some of the bodies are buried.
I shall not be sidetracked by some of the broader issues that have been raised. I do not propose to deal with the rate support grant system which was raised by my hon. Friend the Member for Hertfordshire, West (Mr. Jones). We have had several debates on housing policy generally, in which the hon. Member for Walsall, North (Mr. Winnick) has taken part, and I shall certainly not embark on a macroeconomic speech on some of the other issues that were raised.
§ Sir George Young
I must try to answer some of the questions which have been posed. If I have time towards the end, I shall give way to the hon. Gentleman.
I propose to start with housing mobility, the first issue raised by my hon. Friend the Member for Hornsey and Wood Green. The Committee made a number of recommendations about the national mobility scheme. The scheme is a voluntary arrangement between local authorities, and the Government have no power to compel membership or compliance. Of course, we must try to persuade authorities to honour their commitment to offer I per cent. of vacancies to applicants for the scheme, and eventually to increase that percentage. I have just become the chairman of the National Mobility Steering Committee and I intend to use that position to discuss the possibility of expansion with the local authority associations.
The mobility scheme is just one part of our policy towards improving housing mobility. It is useful and we will do our best to develop it. We have the right to exchange as part of our tenants charter, and we have also implemented the tenants exchange scheme.
I now turn to the issue of dog licensing. The Committee said:The Deportment is obviously having difficulty in deciding what to do:270 I would not dissent from that. I shared the Committee's hope when the House debated my Department's Estimates last year that the vexed question of dog licensing might have been resolved by now. We have long acknowledged, on financial grounds alone, that the present licensing arrangements are absurd. We remain determined to change them. As the House knows, it is not an issue on which any Government finds decisions easy, and it has not yet been possible to announce our conclusions on the future of dog licensing in Great Britain. Opinions are sharply divided, and I am grateful that this year the Committee has made a firm recommendation on the course which the Government should follow. We will, of course, consider that carefully before we reach a decision. However, I must remind the House that abolition of the requirement to have a licence to keep a dog would require primary legislation, and I cannot guarantee that an early opportunity for that will be available.
§ Sir George Young
I shall finish this before I give way.
I understand the impatience and frustration underlying the motion tabled by my hon. Friend the Member for Hornsey and Wood Green to reduce the Estimates in relation to provision for the issue of dog and game licences. As I have just said, I must plead with him and the House to be patient a little longer. The policy is notfficequite ready to leave the kennel. We want to consider the Committee's recommendations, which have been with us for less than two weeks.
I must stress that our arrangements with the Post Office, which collects the licence fee on behalf of local authorities, are contractual and we cannot bring them to an end overnight before an alternative to the present licensing system is in place. As I have said, the aboliton of the licence requires legislation. I think that it would be a precipitate step for the House to reduce Supply tonight, although I appreciate my hon. Friend's wish to see the present arrangements brought to an early end.
§ Sir Hugh Rossi
Can my hon. Friend say how long it would take to terminate the existing contractual arrangements with the Post Office if the decision was made to do that? Can he also explain why that cannot be done, even before the Government make up their mind whether to introduce a different scheme? My Committee was primarily concerned with the waste of public money.
§ Sir George Young
I think that there would be a penalty if the Government broke the contract with the Post Office. I am afraid that I cannot give my hon. Friend the precise details of the contractual arrangements with the Post Office or how much notice we would have to give. However, we could not bring them to an end overnight and we would have to compensate the Post Office. I shall of course write to my hon. Friend as soon as I have that information. However, I hope that my hon. Friend will feel able to withdraw the motion on the assurance that we wish to bring the present arrangements to an early end. We hope that it will not be too long before we can make a firm announcement.
The report suggested that we should review the home loan scheme in the light of present day conditions and the needs of first-time buyers. We regularly review housing policy and the part that the home loan scheme plays. It provides the first-time buyer who has saved for two years 271 with a grant of £110 and a loan of £600 free of interest and capital repayments for five years. The total figure of £710 is a considerable sum to a marginal first-time purchaser and I know that it is welcome to many people. We are committed to increasing the level of owner-occupation and the assistance to first-time buyers will be kept under review. My right hon. Friend the Secretary of State will shortly be making an order increasing the limits in the light of house price movements. The limits are, and have been since the scheme's inception, reviewed regularly and revised when necessary.
§ Mr. Winnick
The Minister mentioned various schemes for owner-occupation and he will know of our view that there is also a need for rented accommodation. Does he associate himself with the remarks about council housing made by the Minister for Information Technology?
§ Sir George Young
I propose to reply to the debate and the recommendations of the Select Committee.
§ Sir George Young
I read a very good article by my hon. Friend the Minister for Information Technology in The Sunday Times which seemed to be an excellent statement of policy.
I share the concern expressed by many hon. Members about the condition of the nation's housing stock. We must keep it in a satisfactory condition. The latest evidence from the 1985 Greater London house condition survey shows no dramatic alteration since 1979, although the number of dwellings lacking amenities fell. -1 he 1985 inquiry into the condition of the public sector stock showed that local authorities considered that significant sums needed to be spent. We took action and increased the capital resources available by £200 million, and authorities should now be giving increased priority to the problems of their stock.
As the hon. Member for Woolwich (Mr. Cartwright) recognised, more public spending is not the only answer. He talked about partnership, and authorities should develop imaginative solutions on problem estates, involving the private sector where possible. My Department's urban housing renewal unit is making good progress, going round authorities and discussing ways of turning round rundown estates, and schemes for 24 estates have already been approved.
We are not standing still and decisions are being made, but we need a full survey to help us decide priorities. That is the point of the English house condition survey every five years. The survey starts in September and will be larger than any previous survey, involving the collection of more information. Unfortunately, it will take time to analyse the results, and I would not want to predict how long that might be. However, in response to the Select Committee's request for a further report on these matters before it considers the 1987–88 Estimates, I shall let it have a note on the progress we have made.
Finally, on the Department of the Environment's Estimates, the hon. Member for Blackburn (Mr. Straw) mentioned the London Docklands development corporation. The Select Committee commented on the administrative costs of the corporation and I welcome, as it did, the progress being made to reduce its costs. There 272 was an absolute fall in its administrative budgets in 1986–87 compared with 1985–86. I know that the corporation wants to make more progress, and I intend to encourage it.
If I do not deal with all the points made about the Property Services Agency, I shall write to hon. Members. This is the third time that the Select Committee has examined the PSA Estimates and, as we might expect from its Chairman and members, it has turned in a thoroughly useful report. I particularly welcome the constructive nature of its work. An essential part of the Committee's job is to monitor the PSA's current performance. I hope that we have been able to show that, where improvements are needed, they are in hand.
Much of the report is directed at making forward-looking recommendations on the way in which the PSA expenditure should be handled and presented. Some of them are not easy to accept and implement, particularly those which come up against the normal conventions, whatever hon. Members may think about them, which involve increased public expenditure. But all the recommendations are helpful and workmanlike. We should like to move in the direction proposed by the Committee, and its ideas and support will be valuable in making progress.
The Select Committee criticised the Government for not setting up a monitoring system when PRS started in 1983 which might have identified what economies were being made. With the benefit of hindsight, I accept that criticism, although it is fair to add that at the time this measure was one of several aimed generally at promoting greater cost consciousness among Civil Service managers. We would have argued, as indeed Lord Rayner did, that it was justified on those grounds. However, the changes that will take effect on 1 April 1987, following a major review of the system are a step forward from the original concept of PRS. This time we have thought it right to monitor the effects.
Therefore, we asked all Departments to complete a questionnaire showing the current size of their occupations of the civil estate, their expenditure on their present delegated functions, and the staff resources deployed on PRS. We shall ask the same questions in subsequent years and so compare the position before and after. We have also commissioned annual performance reports from the new formed planning and liaison system that we are setting up between the PSA and our client Departments throughout the regions. We shall be looking more selectively at the value for money being achieved in certain properties where consultants will advise us on what is being achieved under the existing rules by the PSA and what happens when clients take on the increased delegations that they will have from 1 April next year.
I do not claim that these results will show conclusively that the PRS is solely responsible for any given level of savings, because one cannot always isolate any one pressure for economy from the many other measures that we are taking to promote cost effectiveness. We should at least have a much better starting base for considering the case for any further changes in the system when it is next reviewed in 1988.
My hon. Friend the Member for Hornsey and Wood Green referred to commercial accounts. We see the potential advantage of commercial accounts, but we are also aware that, as well as possibly being expensive to introduce, they might not be easy to adapt to the PSA. 273 Before going ahead, we want to make a thorough study of the advantages to be gained and the cost involved. That is why we are calling in consultants to make a study of the options. We expect to do this during the summer. I cannot give a date for a completion of the study because it will, to a large extent. he dependent on what the study finds. We envisage the consultancy being divided into at least two stages so that we have an opportunity to stop and think about any problems revealed in the early work. I hope to he able to show the Committee at least the first fruits of this work when it examines the PSA on our Estimates for next year.
On capital expenditure, there have been a number of comments that the convention for the public sector was different from the convention for the private sector. The study to which I have referred will necessarily have to look at different treatments of PSA capital and current expenditure and we must await that study to see what options are available.
My hon. Friends the Members for Hornsey and Wood Green and for Hertfordshire. West spoke about buying offices as opposed to leasing them. It is some time since we did a detailed study of the economics of owning freeholds as opposed to leasing, and we should be happy to look at the situation again. The Committee makes the fair point that recent movements of the property market are likely to have reduced the current advantages of purchasing options. The inherent advantages of ownership are likely to be large enough for us to continue to gain, and we shall bear in mind the Committee's recommendations.
§ Sir Hugh Rossi
The point is not merely the possibility of being able to buy freeholds instead of leasing, but the ability to move into the market quickly if an opportunity comes to buy a freehold at an advantageous price. That requires immediate action and great flexibility. Can that be looked at?
§ Sir George Young
I hope that my hon. Friend's persuasive report will be read by the Treasury which, as he will know, has overall responsibility in public expenditure for decisions such as this. I accept that there are advantages in owning one's estate rather than leasing it.
There have been errors in estimating the procedures and the performance to which my hon. Friend the Member for Hertfordshire, West referred. No Minister can be happy that any errors in estimating should occur, hut, at the very least. I hope that the size of the errors and the number of cases will be reduced in later years both by the use of improved control procedures and by stricter application of these to projects. An essential part of the procedures is close monitoring of performance. I am involved in this myself because all larger schemes have to be reported to me before a contract is let, and I shall be looking carefully at all of them to see that they are being properly controlled.
As I explained to the Committee in my letter of 19 May, published in the report, we have had cause to tighten up this procedure, which I regret did not operate properly in the case of the Natural History museum scheme. I trust that, as a result, there will be no further cases of that sort. More generally, the PSA has taken on board the need to look at performance not just case by case, the basis on which financial control has previously been carried out, but right across the board. This requires a statistical 274 approach to measuring performance and in the short term may be limited by the need to do it manually. Within the next two years or so, we hope to be able to build this analysis into the replacement computerised management information system for new works projects which is part of the PSA's information technology strategy. We shall try to meet the Committee's request to include in next year's Estimates information about the design stage to which cost figures relate.
I turn to my hon. Friend's suggestion that £20 million should be removed from our Estimates. Of course I understand the concern about the large increase in cost. I share that concern, even though, as I believe the Committee recognised in its report, that is not characteristic of the PSA programme as a whole. The way to deal with such cases is to concentrate on improving the financial control of projects. As I have just said, we hope to make progress. However, it would not strengthen our hand if we reduced the PSA's major new works provision this year by £20 million.
As the Committee knows better than any other right hon. or hon. Member, the vote for this Estimate is very tightly drawn. Already we face major difficulties on new works and other subheads in keeping expenditure within the provision. Most of the expenditure under the new works subhead is by now related to work in progress. On the office programme, out of the total provision of £46 million, about £40 million relates to contracts that we have already let; and because of the pressure on the vote, the remaining £6 million of new starts must now be at risk. Very little, therefore, of the £40 million could be saved without bringing work to a stop and incurring large penalty payments.
To save £20 million would require a ban on all starts for specialised building projects. It would involve stopping progress on two new prisons, providing 1,310 places, and it would also involve stopping work on some court schemes. In both cases, the programmes are urgent. In view of the consequences, of which I hope my hon. Friend is aware, I trust that he will not press that motion to a Division.
I have in front of me a letter to the hon. Member for Blackburn about reorganisation in the north-east region of the PSA that I shall sign the moment that I sit down. I hope that he will find that it is a helpful response to the issues that have been raised.
On PRS, we moved from 1 April 1986 to a new system that assesses the market rental value of each property, building by building. Therefore, occupying Departments will get the full benefit of reduced rental payments by moving from expensive locations to cheaper ones.
The hon. Member for Monklands, West (Mr. Clarke) referred to a matter that he raised in an Adjournment debate about three months ago. The project has not been abandoned. We are looking for the resources with which to make progress. I acknowledge the hon. Gentleman's concern about getting this project off the ground. Conditions are not satisfactory in the DHSS office that is involved. Subject to the usual discussions on resources that take place at about this time of the year, we hope to be able to reach a decision on the matter later this year.
The Committee also drew attention to the PSA maintenance backlog. We accept that more resources will be required. We are holding discussions with the Treasury about it, but I do not have to tell the House that maintenance demands have to be balanced against other 275 public expenditure requirements. That is the purpose of the public expenditure survey upon which we have just embarked.
§ Sir George Young
I am able to confirm that there is no insistence on involvement with the private sector in Rosehill. If the hon. Gentleman looks at the schemes that have been approved by the urban housing renewal unit, he will find that disposal is not a component of the majority of the schemes. However, I hope that he recognises that many Labour-controlled local authorities have entered into agreements with the private sector that involve disposal. The agreements are supported by tenants and local residents. I hope, too, that the hon. Gentleman will not adopt a dogmatic approach by denying the role that the private sector has to play in tackling the problems on estates such as Rosehill.
Vigorous action has been taken by the PSA in the past two or three years to improve performance in those areas where criticism has been voiced. I refer in particular to the steps that have been taken to stamp out fraud and corruption and to improve the management and monitoring of the maintenance operations that are carried out by the PSA's territorial organisation. As recommended by the Committee, we have substantially increased the amount of work that is delegated to occupying Departments under the PRS scheme.
The Committee's report shows that we need to improve the procedures for handling major new works, although the failures have been isolated. I assure the House that the necessary improvements will he tackled vigorously. In effecting those improvements, the PSA's chief executive will be assisted by three new outside members of the PSA's executive board who will bring to it expertise in building, property and finance. Having said that, I hope that the probation upon which my hon. Friend placed me over the £20 million will now be discharged.
§ Sir Hugh Rossi
By leave of the House, Mr. Speaker, may I say that I accept the difficulties that my hon. Friend the Under-Secretary of State has mentioned with respect to the £20 million. We shall investigate the PSA in depth and, therefore, keep our powder dry on that aspect.
As for dog licences, I await my hon. Friend's letter on the contractual relationship with the Post Office. Again, we shall keep our powder dry on that. Possibly, we shall return to that matter at the first opportunity. On that basis, I shall not move the motions.
§ Question deferred, pursuant to paragraph (2)(c) of Standing Order No. 19 (Consideration of Estimates).276
§ It being Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions which he was directed by Standing Order No. 19(5) (Consideration of Estimates) to put at that hour.