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10.15 pm

The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison): Thehon. Member for Hyndburn (Mr. Pope) has raised some important issues relating to housing generally and to Hyndburn in particular. I am pleased to have the opportunity to explain Government policies to assist with the problems that the hon. Gentleman described.

There are a number of policies relating specifically to housing renovation grants, including proposed reforms, that will be of assistance in meeting some of the problems that the hon. Gentleman outlined.

I understand the hon. Gentleman's concerns about the condition of private sector housing stock in Hyndburn, given the historical context. There is a long tradition of owner-occupation in Hyndburn, as elsewhere in north-east Lancashire, and the numbers of people owning their homes are significantly above the regional and national averages. Home ownership in Hyndburn is about80 per cent. The majority of those homes were built before 1919 in Hyndburn's industrial heyday, to house workers employed in local mills. Those properties were built with one eye on the clock and one eye on the purse. It is not surprising that many are deteriorating. That is the legacy of Hyndburn's industrial past.

While it must remain a fundamental principle that home owners are primarily responsible for repairing and maintaining their own properties, there is a long-standing tradition of Government assistance for private sector renewal in particular, for helping owners whose houses are unfit and who cannot afford the necessary repairs. The Government remain committed to that principle. The forthcoming Housing Grants, Construction and Regeneration Bill seeks to create a grants framework within which the work of renewing areas of unfit private housing can take place. We are certainly maintaining our commitment to the tradition of helping private sector home owners of the type that the hon. Gentleman described.

The stated aim of the Government's housing policy is to bring a decent home within the reach of every family. In view of the hon. Gentleman's comments, I draw his attention to our plain commitment to do so in last year's White Paper "Our Future Homes", which took stock of how far we had progressed towards that aim and set the context for the next decade.

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We can take the availability of housing capital resources as a starting point. They remain substantial, and housing investment programme allocations for 1996-97 will amount to £1.217 million, which is a good outcome for housing under the current financial constraints. There are a number of other sources of grant for local authorities. They will be able to bid for £30 million under the housing partnership fund, which is aimed principally at bringing empty properties back into use, and£60 million is available under cash incentive schemes to help tenants move from social housing to owner-occupation.

In addition, in 1996-97, local authority housing will benefit from £260 million for estate action programmes--the hon. Gentleman fairly drew attention to the assistance that housing in Hyndburn has received from the estate action scheme--and £89 million is available for housing action trusts. Both housing action trusts and the estate action scheme are part of the single regeneration budget.

In addition to those sources of grant, in 1996-97, more than £1 billion is available to housing associations under the Housing Corporation's approved development programme. Public resources alone will be unable to cope with the ever-increasing demand for capital investment in housing, and, increasingly, local authorities will have to be innovative in seeking to attract additional resources into housing, principally from the private sector.

The Government are committed to the continued provision of social rented housing at affordable rents. "Our Future Homes" emphasised the Government's continuing commitment to improve the condition of social rented stock and to diversify its ownership through voluntary transfer to new landlords. That positive process has resulted in many improvements, especially for tenants.

The Housing Bill includes measures to introduce new types of social landlord, who can bring in private finance to improve their estates and to keep rents affordable. That will enable a wider range of non-profit landlords, such as local housing companies, to provide social housing. Local housing companies would offer a new way for local authorities to attract private investment into social housing, and they could take on existing social housing through transfers.

As I have said, transfers provide clear benefits to tenants. Their new landlord is in the private sector. Unlike local authorities, that landlord can borrow outside the constraints of the public sector borrowing requirement. Investment in repairs and improvements can be made while rents remain affordable, because the price paid for the properties by new landlords takes account of both their present condition and the investment that is needed. Repairs can be carried out and the debt repaid within affordable rent levels.

Hitherto, most transfers of the type that I have described have been in shire districts, although most "problematic" estates are in urban areas. A new estates renewal challenge fund has been established to help specifically to improve large-scale, poor-quality council estates by facilitating their transfers to housing associations and to other new landlords such as local housing companies.

Such transfers may be difficult without additional financial support to offset negative valuations that require an injection of capital through the housing authority or

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direct to the new landlord to enhance the value of the stock, so that it is a long-term, viable proposition, or to offset poor asset cover where the value of the property is insufficient to provide cover for the borrowing that the new landlord would need to take on. Some public investment may be required before or after transfer.

The new fund is substantial. It will be worth£314 million over the next three years. Local authorities have been invited to bid for resources in 1996-97, and, although that timetable may be too short for some authorities, I ask them to consider working up bids for future years. In addition, I urge all authorities, as part of the annual housing investment programme bidding process, to consider whether the estates renewal challenge fund might help them to deal with their problematic council estates.

The hon. Gentleman drew particular attention to the problem of serious disrepair and unfitness in private housing stock. As I have said, much of Hyndburn's housing is characterised by rundown terraced housing built many years ago, sometimes to dubious standards. According to the local authority's own figures, some 9,500 properties are statutorily unfit for human habitation--about 30 per cent. of the total private stock in Hyndburn. That leaves some owners unable to repair and maintain their homes. Clearly, in those circumstances, the case for selective clearance needs to be carefully considered by the local authority.

The hon. Gentleman mentioned two renewal areas in Hyndburn, first in west Accrington and more recently at Scaitcliffe. Those renewal areas have encouraged a comprehensive and focused attempt to deal with rundown housing. Both areas demonstrate the benefits of proactively targeting resources to specified capital grant on an area basis, rather than responding reactively to unsolicited applications for grants pepper-potted around an area.

There must be realism about the resources that will be available to deal with these issues.

However, the public purse is limited in what it can afford. There is no ducking the conclusion that demand for grants under the Local Government and Housing Act 1989 has far outstripped the available resources.Hon. Members should consider that that Act introduced and promoted a strategic and an area-based approach to investments and to improvements. In particular, it promoted the creation of renewal areas that local authorities, such as Hyndburn, have established where possible.

The Act instituted a coherent range of grants aimed at inadequate housing occupied, in the main, by poor people. It also introduced a grant to give systematic help to disabled people. These provisions have provided a considerable amount of help to poor people and to disabled people. Most importantly, they have offered local authorities help to implement renewal strategies for targeted areas to ensure that the available resources achieve impact and give value for money. Judging by the description that the hon. Member gave of some areas in Hyndburn, this approach could be valuable.

Practical experience of operating the regime has, in some respects, been less than a total success. It has provided local authorities with a good range of tools for tackling renewal. However, mandatory grants have proved difficult to control and predict. That is the feature to

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which hon. Members should pay particular attention.The applications for grants have come from all areas, not necessarily the target area within which the local authority is seeking to achieve results through concerted action.

Individual grants have often led to a pepper-potting of improvements, to a loss of impact and, most crucially, to an undermining and slowing down of progress on area-based activity by pre-empting limited specified capital grant resources. Because of the inability to direct the flow of applications, some authorities have attempted to prioritise them.

The Government's commitment to helping poor people in inadequate housing to repair and maintain their homes is undiminished, but the regime within which that process takes place has to recognise that resources are necessarily constrained, and that there is an overriding need that it should support area-based renewal. In other words, local authorities must have the flexibility and freedom to use resources to best effect without being hampered and frustrated by unsolicited demands for grants that, by law, they have to meet.

That is the background against which I invite the hon. Gentleman to see the Government's proposals. These proposals seek to reform the renovation grants system for home owners and landlords in a way that will leave local authorities such as Hyndburn free to act strategically in key areas.

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