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Local Government Finance
4. Mr. Austin-Walker: To ask the Secretary of State for the Environment what assessment he has made of the total capital receipts currently held by local authorities in England (a) from sale of council homes and (b) from sale of other properties and assets. [735]
The Minister for Local Government, Housing and Urban Regeneration (Mr. David Curry): The stock of usable capital receipts from all assets stood at £1.5 billion at the end of March this year. About 90 per cent. of those receipts are held by authorities whose responsibilities include housing, but it is not possible to say exactly how much of the total derives from the sale of houses. No figures for set-aside capital receipts are available.
Mr. Austin-Walker: Is it not madness that this money sits idle when thousands of families live in squalid housing conditions? Is the Minister not aware that that money could build about 18,000 homes, which could house at least half of those who are currently in temporary accommodation?
Mr. Curry: The hon. Gentleman makes two fundamental mistakes. First, the money is not sitting idle: it is being used--for example, for capital projects. The idea that somehow a great pile of gold coins is under somebody's mattress is a fundamental misunderstanding. Secondly, only a proportion of the money comes from the sale of council houses. Local authorities are required to set aside money from their revenue accounts for depreciation, and I hope that the hon. Gentleman does not intend to lay his hands on that.
All that the Labour party demonstrates by that argument is how little it understands about local authority finance. Opposition Members would be much more plausible if, instead of banging on about that matter, they would just once tell us how much of the capital receipts they would spend over what sort of period, and how they would deal with the problem that the overwhelming amount of these receipts is in the shire districts or the outer London districts. They will not answer any of those questions. All they do is whinge and that, like the rest of their policies, has no substance.
Mr. Jacques Arnold:
Have we not today had a display of the Opposition's total ignorance of accountancy, and of local government finance in particular, which shows why they are not suitable to govern? We have heard precisely from my hon. Friend that the sums involved amount to slightly over £1 billion, but the other side of the local government balance sheet shows £37 billion of local government debts. Therefore, the money is a mirage: it does not exist.
Mr. Curry:
The Labour party cannot come to terms with the fact that, if a local authority has got rid of its debt, it can spend the money on what it likes. It must be a fundamental first charge on any revenues to discharge responsibilities for debt. Once that is done, a local authority has complete freedom. That is merely prudent housekeeping.
Mr. Dobson:
Why will not the Government allow councils to invest those enormous funds to build new homes for the thousands of people who have nowhere decent to live? Last year, the Government restricted
Mr. Curry:
The funds that are attributable to the sale of council houses, which is a proportion, but nowhere near the entire amount of the money, are not used for building new homes, because we do not believe that local authorities are the best providers of housing. [Hon. Members: "Ah!"] There is no mystery about that. We have spelt that out for years. The best providers of housing are housing associations. It is interesting that we have just had a great success because Manchester Labour council has promoted the transfer of one of its major estates to a housing association, which shows that our view is being increasingly accepted.
If the hon. Gentleman is so concerned about housing, if that is such a Labour preoccupation, how is that it, in all the time devoted to discussing the Queen's Speech, Labour is not devoting one single minute to the subject of housing? It is all blather; it is all rhetoric. There is no substance, because the Labour party has no policy that it can defend.
Mr. James Hill:
Is it not true that the city of Southampton has £12 million on deposit, but is in debt to the Government in relation to housing for £90 million?
Could it not be made clear to the public that councils that have spent, spent and spent must be brought under control and that capital receipts, from which they can receive interest, should be held until they balance their books?
Mr. Curry:
That is quite clearly the case, but my advice to councils such as Southampton is to follow the example being pursued by a number of Labour councils, and to recognise that transferring their stock to the housing association movement is a win-win deal for the council that receives the receipt and for the tenants who receive a major refurbishment programme. The last word lies with tenants. That is tenants' choice in action.
5. Ms Eagle:
To ask the Secretary of State for the Environment what discussions he has had with business concerning the 1996-97 national non-domestic rate. [736]
Sir Paul Beresford:
I have received representations from a number of businesses.
Ms Eagle:
Does the Minister agree that next week's rate support grant settlement will mean that businesses must pay higher business rates, that council tax payers must pay higher council taxes, all for fewer services, and that, year on year, under the Tories people must pay more and get less?
Sir Paul Beresford:
I find that extraordinary coming from an hon. Member on the Opposition Benches. If one considers Labour authorities and their behaviour, one would expect the scenario that the hon. Lady has spelt out. If one considers the period just before the uniform business rate, in Liverpool council, Labour-controlled, and Wirral council--which includes Wallasey-- Labour-controlled, there was no concern by Labour local
Mr. Nigel Evans:
Does my hon. Friend agree that it is important to protect small businesses from local authorities such as Labour-controlled Lancashire county council, which is interested only in spending money and not in the level of services that it provides? Does he agree that it is important for us to look at extra ways of helping to protect small rural businesses from the unified business rate? Does he agree that the announcement in the rural White Paper will be extremely important for those small rural businesses?
Sir Paul Beresford:
I agree completely with my hon. Friend, but I would not limit it to rural businesses. We can look back to another example from 1988, 1989 and 1990 to an area which includes Holborn and St. Pancras. We can compare Camden and Westminster. There were filthy streets in Westminster--[Interruption.] Sorry, there were filthy streets in Camden, but the business rate in Camden was 34 per cent. above that of Westminster.
6. Mr. Gapes:
To ask the Secretary of State for the Environment if he will make a statement on the measures that he intends to introduce to reduce homelessness in London. [737]
Mr. Curry:
Up to now, we have received 227 replies to our consultation on the future of the rough sleepers initiative and we shall outline our further proposals in the new year.
Mr. Gapes:
How can proposing to change the obligations on local authorities to provide housing for the homeless in any way assist the poor and their children?
How can cutting the funding for the Housing Corporation or putting further restrictions on what housing associations do assist the homeless? Is it not true, as the Rowntree Foundation's recent study reported, that all that does is simply rearrange the scope of homelessness while doing nothing to combat it?
Mr. Curry:
If the hon. Gentleman follows these things, he will know that there has recently been a House of Lords ruling which states that there is no safety net for the homeless. The Government's legislation--we decided before the House of Lords ruling to invite the House to take the decision--will try to create a single route into housing with a philosophy and idea to which Shelter subscribes.
We intend to create an obligation to house people for a year, which will be renewable, so that for those in need, irrespective of whether the need arises from homelessness or other circumstances, we will look at the underlying basic problems and everybody will feel that their needs are being assessed on a fair basis. I have had detailed discussions with Shelter and other parties to explain how it would work. I believe that many people have been reassured, but I believe firmly that it is in the interest of all those in need that they should feel that their case is being dealt with fairly and on absolutely equal terms.
Mr. Harry Greenway:
Does my hon. Friend agree that, as well as Shelter, the Salvation Army has done a good and effective job by taking homeless people into
Mr. Curry:
I certainly pay tribute to organisations such as the Salvation Army and St. Mungo's. I was at a Drinks crisis centre in Bermondsey this morning. Such organisations do magnificent work helping the homeless. One must be cautious. For some who are in grave need-- for example, those with drug, drink or mental illness problems and sometimes combinations of those problems--it is not sufficient just to provide accommodation. They cannot survive autonomously. They need continued sheltered accommodation and those organisations are particularly good at providing that, and we work in close co-operation with them.
Mr. Raynsford:
Why will not the Minister recognise that the number of homeless households accepted in London, as in the rest of the country, is double the level accepted back in 1978-79 when Labour was last in power?
Why does he intend to make what is already a disastrous situation far worse by his proposed changes to legislation on the homeless? Those changes have been condemned almost universally by all the organisations, including those that the Minister has quoted, which represent tenants, local authorities, housing associations and the Churches. They have all condemned the proposals as being disastrous for the homeless, causing them misery and an appalling degree of deprivation that we have not seen since the era of "Cathy Come Home".
Mr. Curry:
I knew that the hon. Gentleman would end on that note. It is not the case. The people dealing with homelessness every day say that creating a single route into housing is the sensible thing to do. The argument then is how to deliver that; how to provide assessments of underlying needs so that people have all their needs taken care of; and how to ensure that, when housing allocations are made, the particular problems of the homeless are identified.
When the hon. Gentleman examines the Government's regulations and the guidance that will go with them, he will see that we are determined to ensure that those underlying needs are looked after and that nobody finds himself in a situation where he is permanently without permanent accommodation. We shall ensure that that does not happen.
Mr. Dunn:
Does the Minister agree that homelessness in London would be significantly reduced if Labour-
controlled local authorities managed their housing stock more efficiently and effectively, instead of allowing thousands of flats and houses to be empty for months and months?
Mr. Curry:
My hon. Friend is right. It is important that local authorities get to grips with the basic tools of sensible management--collect rents, ensure that they have the minimum number of voids and bring empty property back into use. If those things are done, that will make a significant contribution to housing in this country.
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