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10.43 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): First, I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on securing this Adjournment debate this evening. It gives us an opportunity to discuss, albeit briefly, rural housing. If he wishes to raise other issues, he should write to me, and I shall ensure that he gets a very speedy reply.
I shall begin by outlining some key features of the Government's approach to housing. Obviously, those involve extending choice and developing policies that address people's aspirations. That approach is the same for both urban and rural Scotland. Our objectives are to promote greater housing choice; to assist and enable the provision of an adequate supply of housing; to promote improvement in housing quality; and to seek a more effective use of resources in housing.
Our belief in home ownership is rooted in the view that to be a home owner is a fundamental aspiration of the vast majority of people. I was therefore somewhat concerned to hear what the hon. Gentleman had to say about home ownership. Surveys suggest that 70 to 80 per cent. of households would ideally like to be home owners, and we wish to enable as many people as possible to achieve that aim. We can therefore take
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I am still firmly of the view that local authority tenants in rural areas who aspire to become home owners should have every opportunity to purchase their homes. However, we recognise that there are special housing problems in rural areas. The Government fully acknowledge those, and adequate provisions exist within the right-to-buy legislation to enable rural local authorities to re-purchase housing, should that be desirable in helping them to meet local housing needs.
The increase in owner-occupation has been achieved principally through the right-to-buy scheme and a number of schemes operated by Scottish Homes as part of their low-cost home ownership programme. Those schemes are available to people in rural areas who wish to become home owners, and we have also developed specific mechanisms aimed at assisting with the particular problems in those areas.
Rural home ownership grants help individuals to build a new house or renovate an existing one. Those grants bring empty houses into use, increase home ownership and reduce homelessness.
We recognise, however, that some people cannot afford--or, for whatever reason, do not wish--to buy their own homes. We believe that it is vital that there should be a choice of quality rented housing available for such people, and we want to ensure that the same choice is available in rural areas.
That is why we have promoted housing associations as alternative landlords and they are now the main source of new social housing. There are now some 290 registered housing associations and co-operatives, providing 90,000 homes for let at affordable rent. Housing association grant is the principal instrument for meeting the needs of lower income groups in rural Scotland.
An important feature of our policy to encourage greater choice of social landlords in Scotland has been the transfer of public sector stock to new landlords. That policy is not new, and we are now encouraging all local authorities to consider transferring their stock in that way. Such transfers free investment in the housing concerned from the constraints of public expenditure control, and increase the level of investment in the housing stock. There is no reason why transfers should not be used in rural areas as elsewhere in Scotland.
We recognise, however, that there are particular housing problems in rural areas, and we have made substantial resources available to both rural local authorities and Scottish Homes to enable them to tackle those problems. From 1979 to March 1996, rural authorities have been allocated £1,669 million for public sector investment. In addition, between 1989 and March 1996, Scottish Homes invested more than £360 million in rural areas, providing more than 12,000 new or improved homes. Scottish Homes aims to invest almost £60 million in rural areas this year to provide more than 1,500 new or improved homes.
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We also asked Scottish Homes, as one of its first priorities after it was set up in 1989, to draw up a policy to address the special problems of housing in rural areas. As a result, it operates a number of schemes that can help with the problems associated with housing in rural areas. Those include shared ownership schemes, which are used extensively in rural Scotland, and can be particularly beneficial in helping local people enter home ownership in pressurised housing markets.
Rural home ownership grants are also available to help people on modest incomes to build their own homes or renovate an existing building.
The Scottish Homes empty property initiative and the lead tenancy schemes can also help with problems associated with housing in rural areas. Scottish Homes is currently reviewing its rural policy. As part of that review, it commissioned a research report on its rural policy, which was prepared by the Arkleton centre for rural development at Aberdeen university and published in November last year.
The report found that Scottish Homes had had a considerable impact on housing development in rural areas, acting as a catalyst for the development of strategies to meet the needs of rural communities. It also concluded that the formulation of an explicit rural policy is widely seen as a model for other Government agencies to emulate. By giving explicit recognition to rural issues while incorporating those into the main stream, awareness of rural issues has been increased.
Mr. Charles Kennedy (Ross, Cromarty and Skye):
I appreciate that my question goes wider than the Minister's remit, but one of the difficulties that I notice facing rural local authorities in areas such as Alness and Easter Ross, parts of Inverness and, no doubt, other areas in Scotland is that urban-style housing problems exist in a rural context. There may be a concentration of less than satisfactory council housing, particularly in the highlands, built as a result of the industrial developments of the 1960s and 1970s and now in sub-standard condition. An urban approach such as urban aid is required. If the local authorities lose out in their applications, they have a real difficulty, because they must somehow apply an urban solution. Will the Minister undertake to encourage his Department to consider more imaginative ways of tackling the problem?
Mr. Robertson:
If the hon. Gentleman has any specific examples or problems from his constituency, I should be delighted to discuss those with him in greater detail than is possible in a short Adjournment debate.
I return to the Scottish Homes review, in which I know the hon. Member for Orkney and Shetland and his wife take a keen interest.
Scottish Homes announced its rural policy in September 1990. It had four broad objectives: to increase the housing supply in rural areas, to improve housing conditions in rural areas, to improve access to rural housing, and to increase resident participation and involvement as part of community development in dispersed rural areas. Underlying that approach were general principles of working in partnership, supporting sustainable regeneration and supporting economic development.
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As I said, the Arkleton centre at Aberdeen university reviewed Scottish Homes rural policy in the light of experience, the White Paper entitled "Rural Scotland: People, Prosperity and Partnership", and the reorganisation of local government. Of course the review identified a number of aspects in which improvements might be made, but the thrust of its findings was mainly positive.
The review found that Scottish Homes rural policy has had a considerable impact on rural areas, acting as a catalyst for the development of strategies to meet the wider needs of rural communities. Investment in housing association provision has made a major contribution to improving the variety of housing options for people in rural Scotland. The policy has succeeded in encouraging private developers to build in rural areas, where they would not otherwise have operated because of narrow profit margins.
Scottish Homes support for local housing associations and local housing agencies has played an important role in supporting community development and involvement. The rural programme contributes directly to employment and economic development in rural areas, and has the potential to support economic development strategies indirectly. The formulation of an explicit rural policy is widely seen as a model.
The review is on-going. If the hon. Member for Orkney and Shetland wishes to contribute to it, he may do so directly to Scottish Homes or through me. He mentioned the need for investment in rural council housing. Housing has had to play its part in a tight public expenditure round.
Mr. Wallace:
Before the Minister leaves the rural homes policy review, how does he respond to the clear recommendations in the review? Scottish Homes does not seem to be giving resources to rural areas commensurate with the number of households in Scotland's rural areas. It is recommended that the primary emphasis must be on the provision of affordable rented housing, with local flexibility to take account of the need to achieve a proper balance between low-cost home ownership and rented accommodation.
Mr. Robertson:
As the hon. Gentleman knows, Scottish Homes has considerable licence as to how it operates. I meet the chairman and board twice a year to review the strategic objectives. The rural review is one of the subjects that will be discussed when we meet soon. I am happy to feed in the hon. Gentleman's comments.
As the hon. Gentleman pointed out, this year's public expenditure survey is tight, and housing has had its share of cuts. The reduction in resources arises from the requirement for local authorities to set aside 75 per cent. of the receipts from house sales next year rather than 50 per cent., as we envisaged originally. That change results from the overriding need to tackle the burden of debt. Despite the controls on the use of capital receipts that were imposed last year, local authority housing debt has continued to rise, and the average debt per house has also increased. We believe that further steps should be taken to reduce the burden of indebtedness.
Following that change in the receipts rules, I decided that it was no longer sensible to issue housing allocations on a gross basis. In future, local authorities will receive a net allocation for housing investment, and I announced
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The total net allocations for 1997-98 amount to £171.9 million, and are higher than those issued to authorities in 1996-97. In addition, on the basis of councils' own estimates, I would expect them to generate useable receipts of between £50 million and £60 million next year in order to augment their investment. The change in the rules on receipts set-aside means that some redistribution of resources has been necessary to protect those authorities, such as Orkney, that are most reliant on receipts. That has worked to Orkney's advantage, because the gross estimated resources available are higher than the central planning assumption on which the council planned its forward capital programme.
I accept that that change has reduced the net resources available to Shetland by some £266,000. In determining the distribution of the resources available for investment, I decided that it was necessary to spread the impact of the change in set-aside rules equitably over all authorities. The redistribution of the net ensures that all authorities are able to meet their forward legal commitments, taking account of each council's own estimate of the capital receipts that it expects to generate next year. In the main, the councils' estimates were consistent with our own, but my Department will continue to monitor the situation to ensure that no council can exploit the new method of allocating resources by deliberately underestimating receipts.
The hon. Gentleman suggested that it would be sensible to link set-aside to the level of debt in each authority, but I cannot accept that, as it would be too complicated to operate a different regime for each authority. In any event, authorities with lower debts, such as Orkney, stand to benefit if they become debt-free more quickly. I believe that considerable scope exists for authorities to increase investment levels by involving the private sector to a greater degree than occurs at present. Authorities should therefore be considering the potential for transferring stock to other landlords outwith the necessary constraints of the public sector.
As the hon. Gentleman is aware, I visited Orkney last September, and this was one of the main items of our discussion with the council. I welcome the consideration that the council is giving to transferring its stock to a new landlord, and I hope that it will take forward that idea in consultation with my officials. After all, the transfer of the council's stock to a new landlord not only would facilitate increased investment in the existing stock, but potentially could produce a substantial receipt of which any surplus remaining after debt redemption could be invested in the provision of new rented housing.
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