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Mr. Chris Davies: I give credit to the estate action money. Within the ward I represent as a councillor in my constituency--the Holt village ward--almost 1,000 properties have benefited hugely from the project. Down the road, the estates to which I referred--Alt and Roundthorn--have identical housing, but as a result of being unlikely to meet the single regeneration bid rules, they could well languish in an unmodernised state while, across the road, their neighbours have benefited. Does the Minister hold out any prospect of the overall size of the cake being increased?
Mr. Clappison: I am pleased that the hon. Gentleman accepts that the estate action programme has benefited the parts of his constituency to which he referred. He has referred to other parts of his constituency--the Alt and Roundthorn estates. I will draw attention to ways in which such estates can benefit, especially from new sources of capital funding. I draw the attention of the hon. Gentleman and his constituents to those sources of funding.
The challenge fund for the single regeneration budget promotes an integrated approach to local regeneration, and it is not possible to identify separately the exact resources directed at housing. However, about 70 of the schemes approved in the first round of the single regeneration budget challenge fund have a significant housing content. Those schemes received about £70 million of SRB resources in 1995-96 and will receive a further£150 million in 1996-97. Schemes with a significant housing content were even more successful in the second round of the challenge fund, and will receive more than £100 million in the first two years.
Both Oldham and Rochdale have been successful in bidding for the SRB challenge fund--Rochdale in rounds 1 and 2 for Canalside and Middleton Pride respectively, and Oldham in round 2 for Westwood. The local authorities will receive more than £30 million in total from the SRB for those schemes. I hope that they will bid for the third round of the challenge fund, which will be launched at Easter this year, and be equally successful.
I turn to other sources of funding and begin with the housing partnership fund under which local authorities can also bid for resources. In 1995-96, £30 million has been awarded to 220 housing schemes and the combination of public and private sector money means that up to £108 million will be invested to meet local housing need, help stimulate local economic growth and create jobs. The projects funded involve a wide range of schemes, from conversion of warehouses to provide social housing, to energy efficiency schemes, and they bring long-lasting benefit to local communities.
Last December, we invited bids from local authorities for the 1996-97 scheme. This year, we will be placing particular emphasis on schemes that bring empty properties into use from both the private and the public sectors. The response from local authorities has been very encouraging, and we will be making an announcement on the successful bids shortly.
Challenge funding of local authority spending has developed rapidly over recent years, and has proved its value. It drives up standards of service and ensures that public funds are directed where they can achieve most. We intend to build on the success of current programmes and continue the drive towards challenge funding. We are therefore considering the introduction of a capital challenge fund for distribution of Government support for local authorities' mainstream capital spending. Consultation on that proposal ended on Friday 15 March, and we are now considering the responses.
Government funding is, of course, not the only source of resources for expenditure on housing. Local authorities can also fund capital expenditure on housing from revenue contributions to capital and from their usable capital receipts. Of course, local authorities must set aside 75 per cent. of housing receipts and 50 per cent. of other receipts for debt repayment. We believe that it is right that local authorities should set aside a portion of their receipts for the repayment of debt. That reduces the burden on council tax payers of servicing local authority debt and has wider benefits for the economy. However, local authorities are free to spend the remainder as they wish. They should therefore regularly consider whether they can generate additional capital receipts.
In addition, as public funding is limited, local authorities should consider ways of increasing private investment. The single regeneration budget challenge fund and the housing partnership fund have shown that local authorities can form partnerships with the private sector, thus securing private finance in addition to public funds for projects that benefit the community.
I come to another important option in the context of the hon. Gentleman's remarks. We would urge all authorities to consider the transfer of their housing stocks to a private sector landlord. We have in place a very successful programme of voluntary transfers, bringing considerable benefits to local authorities and to their tenants. Transfer is one of the best ways of bringing in private finance to improve the condition of social housing stock. Authorities gain a sizeable receipt, which is used first to pay off housing debt.
In addition, authorities will usually also have receipts that they can invest in social housing in their area. Tenants benefit from improvements to their homes, rent guarantees from their recipient landlords and a greater say in the management of their homes. To date, 47 local
authorities have transferred almost 213,000 properties to new landlords. Those transfers have attracted almost£3.5 billion of private sector funding and have generated receipts of well over £2 billion for local authorities.
Transfers to date have not been confined to the south of England; there have been a number in the north of England not too many miles away from the hon. Gentleman's constituency, including areas such asSouth Ribble. We expect that Manchester city council will shortly be transferring 1,400 properties on its Partington estate to Manchester and District housing association.
So far, most large-scale voluntary transfers have taken place in shire districts where the stock is small and in relatively good condition, but we are keen to bring the benefits of transfer to urban and inner-city areas with non-traditional housing. We are committed in the Housing Bill, which is currently being considered by the House, to widening the range of recipient landlords to include local housing companies. The proposed legislation will, for the first time, enable a wider range of non-profit-making landlords to provide social housing--either by receiving stock transferred by local authorities or by acquiring or constructing houses with Housing Corporation grants.
In addition, last year the Secretary of State announced a new challenge fund, the estates renewal challenge fund, designed to facilitate the transfer of poor-quality council housing estates to new social landlords to secure their improvement through increased investment. The type of estates that will benefit are those where low or negative valuations or poor asset cover means that transfer in the usual way, which I have just described, is not a viable proposition.
More than £300 million will be made available through the scheme over the next three years. Grant may be paid towards a range of costs associated with transfer, including the costs of dowries to new landlords where the
stock has a negative value, essential repair, maintenance and capital works and the preparatory and set-up costs for the new landlord. The scheme is, of course, voluntary, and transfers will go ahead only where both the local authority and the tenants are in favour.
Grants will be awarded on a competitive bidding basis. Local authorities were invited just before Christmas to start drawing up outline bid proposals to be submitted by mid-February. There has been a very encouraging response. More than 30 local authorities have submitted bids for funding, totalling some £100 million during the first year. They are being considered and authorities will be invited to work up the most promising into detailed bids for submission by the end of April.
We will invite bids for the second year, 1997-98, in September 1996, and I understand that both Oldham and Rochdale will consider the applicability of the fund to them when preparing their housing strategies in 1996.
In summary, local authorities have a key role to play in ensuring that housing needs are met in their areas. They are responsible for setting housing objectives and implementing strategies to meet them, while making best use of the resources available. However, public expenditure will always be limited and local authorities cannot spend as much as they would like on improving their housing. They should therefore consider some of the options that I have outlined, including transferring their stock to private landlords because that can benefit both the tenants and the local authority.
I hope that I have answered many of the hon. Gentleman's questions and set out ways in which his constituents in the estates to which he referred can benefit from our housing policies.
Question put and agreed to.
Adjourned accordingly at twelve minutes past Twelve midnight.
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