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Housing (Scotland)
7.16 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): I beg to move,
- That the draft Housing Support Grant (Scotland) Order 1997, which was laid before this House on 22nd January, be approved.
The order provides that the total level of housing support grant payable to Scottish local authorities next year will be £15.2 million. Grant for mainstream council housing totalling £11.9 million will be paid to three authorities--Highland, Shetland and Western Isles. Broadly speaking, that sum represents the difference between the eligible expenditure and the relevant income of those authorities which, in the absence of grant, would have a deficit on their housing revenue accounts. Its purpose and the assumptions used are explained in detail in the report that accompanies the order.
The housing support grant order also includes an element--the hostels portion--that provides a contribution towards the running costs of local authority hostels for the homeless. Hostels grant will total £3.3 million to be paid to 20 authorities across Scotland, which will help to support around 2,300 places for homeless persons.
The 1997-98 grant calculations assumed expenditure of £834 per house on the management and maintenance of the housing stock. This represents an 8.2 per cent. increase over the equivalent figure for the current year, and brings the estimate into line with authorities' actual expenditure in 1996-97. For the purpose of the housing support grant formula, the assumed average standard rent for next year has been increased by only 2 per cent., to £39.38 per week, in line with the general rate of inflation.
I should also stress that that is not a forecast of rent levels, nor is it a guideline or recommendation; it is simply an assumption used solely for the grant calculation. Actual rents charged by authorities are, of course, a matter for local decision, and with so few authorities now qualifying for grant in respect of their housing costs, subsidy decisions have little impact on these decisions.
I understand that some authorities propose to increase rents well ahead of inflation. It will be for them to justify those increases to their tenants. Local authorities should consider very carefully the consequences for tenants of increasing rents substantially. I remind the House that the average local authority rent in Scotland in the current year, at £31.28 per week, is well below the English equivalent of £40.06.
As hon. Members will be aware, housing support grant has declined steadily since the early 1980s, in line with the Government's policy of moving away from such indiscriminate subsidies and targeting resources towards those tenants who are most in need through the housing benefit system. In the current year, it is estimated that council house tenants in Scotland who are unable to afford the full cost of their housing will receive rent rebates totalling £587 million. Housing benefit assistance will continue to be available for those who need help with their housing costs.
With only three authorities now qualifying for grant in respect of their mainstream housing, exploratory discussions have taken place with Shetland, the Western Isles and Highland councils with a view to reducing their housing debt to manageable levels and thereby removing the on-going need for HSG subsidy. Those discussions culminated in my right hon. Friend's announcement on Budget day of the Government's intention to commute a portion of the housing debt of the three councils.
The proposal is to convert the annual HSG subsidy paid to the councils into a capital grant and use that money to reduce the councils' outstanding debt to a level where they will no longer require subsidy. The on-going cost of servicing the debt would be offset against future HSG provision.
Rather than continuing to operate the current rather cumbersome HSG procedures for only three authorities, the Government consider that the early redemption of debt would be a more efficient use of available resources. The debt redemption proposals would place the housing revenue accounts of the three authorities on a firmer footing. Subject to detailed negotiations with the three councils, we would hope to redeem the debt before the end of the 1997-98 financial year.
Mr. Calum Macdonald (Western Isles):
Will the Minister give an assurance that agreement will be reached with the councils, and that no formula or solution will be imposed upon them?
Mr. Robertson:
I give the hon. Gentleman that assurance. That is why we are not acting right away: we want to talk to the councils and take them with us every step of the way.
I also draw the attention of the House to the question of general fund contributions. Such contributions represent a subsidy from council tax payers to council tenants. Like HSG, this kind of subsidy is indiscriminate, in that it benefits all tenants regardless of their personal circumstances. It is also unnecessary, as tenants who are unable to meet the costs of their housing receive assistance in the form of housing benefit.
Therefore, as has been the case in recent years, the Housing Revenue Account General Fund Contribution Limits (Scotland) Order 1997, which was laid before the House on 3 February, prevents authorities from budgeting to make general fund contributions to the housing revenue account next year.
Dr. Norman A. Godman (Greenock and Port Glasgow):
Will the Minister provide an assurance that he will be sympathetic to the representations made by Inverclyde council? Not long ago, the Minister of State visited an area of Greenock that is bedevilled by very serious housing problems. There are equally grave housing problems elsewhere in Greenock and Port Glasgow. I hope that the Minister will treat those representations as sympathetically as his hon. Friend did some 18 months ago.
Mr. Robertson:
I assure the hon. Gentleman that I treat sympathetically and sensitively all representations made to me.
Mr. Malcolm Chisholm (Edinburgh, Leith):
The Conservative party has waged a vendetta against council housing for 18 years, culminating in the Minister's open admission that he wants to see every council house in Scotland sold off and transferred to the private sector. He claims that that should happen with the consent of tenants.
However, we can be absolutely certain that, if this Government were returned for a fifth term, they would put the screws on council tenants even tighter, and force them out of the council sector and into the hands of private landlords. That would not be considered if there had been a Labour Government or a Scottish Parliament for the past 18 years. Housing will be the responsibility of a Scottish Parliament, and Scottish people who are concerned about housing cannot wait for the return of a Labour Government and the establishment of a Scottish Parliament.
The facts about housing--particularly council housing--speak for themselves. Since 1979, there has been a net decline of 343,000 houses available for rent in Scotland. Last year, local authorities built only 308 new homes. At the same time, about 185,000 households are on local authority housing waiting lists, and the number of households applying to local authorities as homeless has more than doubled over 10 years, from 20,000 to more than 41,000. About 1,000 people sleep rough in Scotland each night.
Since the present Prime Minister took office nearly seven years ago, housing investment in Scotland has been cut by 39 per cent. in real terms. If investment since 1990 had simply kept pace with inflation, there would have been enough money to build an extra 26,500 affordable homes. The house condition survey was conducted during that period, and the facts it revealed are chillingly familiar: 95,000 houses in Scotland below the tolerable standard, 580,000 houses in urgent need of repair and 267,000 houses affected by dampness, including an estimated one in three council houses.
Mr. Phil Gallie (Ayr):
Is it not true that 18,000 homes were built in Scotland in each of the past three years? Is it not also projected that 130,000 homes will be required in the next 10 years? On that basis, are the Government not on target to meet anticipated need?
Mr. Chisholm:
The hon. Gentleman should do his sums again. Average new build in the housing association and the council sector has averaged about 4,000 in each of the past 10 years, compared with an average of 12,000 a year under Labour in the 1970s.
Housing is also a health problem. I have the advantage of being responsible for the areas of housing and health, and I frequently point out in health debates that, if people did not live in cold, damp homes, it would have a beneficial effect on the health of the nation.
There is another reason why the distinction that the Secretary of State tries to make between health and local government is completely phoney. Local government is crucially involved in health delivery via community care, but also through housing and other areas that are very important when considering the causes of illness.
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