Examination of Witnesses (Questions 500-519)
28 JANUARY 2004
RT HON
KEITH HILL
MP, MS ANNE
KIRKHAM AND
MR JEFF
HOLLINGWORTH
Q500 Chairman: And in the RSL?
Keith Hill: The figure I have
in mind for the RSL is nearer to 10% where there are the hazards
identified under the Health and Safety Rating system.
Q501 Chairman: But you still think that
the 2010 deadline can be met?
Keith Hill: Two things. First
of all, the Government is determined that we should meet the 2010
target and we are providing the resource and the opportunities
for that target to be met. Secondly, I have to believe that local
authorities and tenants will want themselves to benefit from the
opportunities of significant improvements in people's own homes
by that date.
Q502 Mr Betts: When your officials came
before us they did not seem terribly confident that they could
guarantee that the target would be met by 2010. They could not
give us even a risk assessment as to whether it might be met or
not. Are you absolutely certain that the target is going to be
hit?
Keith Hill: We are determined
to work with local authorities to ensure that the target will
be reached but, of course, it takes two to tango. The Government
is obviously wholly committed to this programme, both in terms
of the support that we are offering to local authorities and in
terms of the resource that we are making available, and also in
the pressures that we are applying to local authorities. As you
know, we expect local authorities to have completed their options
appraisal process by July 2005 which provides the appropriate
leeway for meeting the target by 2010. Nevertheless, if local
authorities do not measure up to the opportunity then there is
a limit to what the Government can do to oblige them to get on
with the business of delivering Decent Homes to their localities.
I have to say, as I began by saying, that there is an additional
issue, as we have seen in the Camden case which I hope we can
turn round, if tenants themselves vote against the opportunity.
Q503 Mr Betts: So if the target is not
met it is local authorities' fault or tenants' fault?
Keith Hill: I do not want to get
into a blame culture. I want to co-operate. This is a matter of
partnership; it has to be absolutely a matter of partnership.
The Government is not faltering in its commitment to achieving
this but we expect the other partners to rise to the challenge
and the evidence is that the very great majority are rising to
it.
Q504 Mr Betts: Except that if you look
at the figures, looking at the rate of progress so far on bringing
homes up to the Decent Standard, from the figures you have supplied
to the Committee it appears that it is going to take another 10
years at the current rate of progress to achieve the target of
all homes reaching the standard, not the six years that we have
actually got.
Keith Hill: Remember that we are
in a new process with the options appraisal process and it has
been a learning curve and local authorities have had to improve
their approach to these matters. Therefore, as in all programmes,
in the initial stages one can expect to be somewhat slower but,
once programmes are understood, once schemes are in place, there
is a learning curve and we would expect the process to accelerate.
Q505 Mr Betts: But that is a bit contradictory
to some of the discussion we had with Anne Kirkham when she came
before, because I think there was an acceptance that local authorities,
and indeed other organisations, may well begin by tackling some
of the easier properties which cost less to get up to the Decent
Homes Standard and put on one side for a later date some of the
more difficult ones with a higher unit cost. If we are going to
increase the rate at which we improve properties and the unit
is going to go up, does that not imply a substantial increase
in spending per year?
Keith Hill: I have to say that
I have not seen the detailed evidence on that, even on the issue
of local authorities starting with the easier cases and I would
be interested to see that, particularly if it was supplied by
my own department. Let me say that in broad terms we are clearly
making progress Since 1997 something like a million homes have
been brought up to the Decent Homes Standard. Let me anticipate
a possible line of questioning by saying that we do not expect
the target of a third to be met by March 2004 but we certainly
expect it to be met in the course of 2004. Broadly speaking, from
April 2001 to March 2004 500,000 properties will have been brought
up to the Decent Homes Standard and beyond that, either in process
or about to start or where bits have been made, there are something
like another 550,000 homes in the programme, so already considerable
progress is being made towards achieving the target.
Q506 Mr Betts: Would it be possible to
let us have a forecast from the department as to how many properties
you expect to be brought up to the standard in each of the years
up to 2010 and the financial consequences that go alongside that?
Keith Hill: We will certainly
have a stab at that for you.
Q507 Chairman: You have told us that
you have been going round looking at the successes where all this
work has been done. Is there any prospect of you going round some
of the failures and stamping on toes or offering to tango with
other people?
Keith Hill: It depends, Mr Chairman,
what you mean by "failures".
Q508 Chairman: The ones who are not at
this moment beginning to get to grips with either getting their
plans into place or actually implementing their plans.
Keith Hill: I give you the absolute
assurance that as a department we are very heavily engaged with
those authorities. We have got a pretty fair picture about progress
being made. Bizarrely, if I might say so, I have discovered that
it is apparently not the done thing for a minister to go to an
area of failure. Apparently ministerial visits are deemed to be
an accolade rather than a castigation, but it is very odd, is
it not?
Q509 Mr Betts: The photo ops are not
quite as good either!
Keith Hill: Absolutely. That is
what my immediate people may be thinking of mainly. I hope that
also gives you the reassurance that I am very clear about the
authorities which are not up to snuff on this one and we are bearing
down, perhaps by less photogenic means, on these authorities.
Chairman: Perhaps I could suggest to
you that when you come back before the Committee on the estimates
we might want a progress report and perhaps a little naming and
shaming at that point.
Q510 Mr Betts: When the Deputy Prime
Minister came to Sheffield a few weeks ago, quite rightly, every
other sentence had "sustainable communities" in it.
This is one of his great commitments, quite rightly, but when
the Audit Commission gave us some evidence they indicated that
if sustainable communities are going to be created as well as
a Decent Homes Standard we are going to need even more funding
than that which is currently being estimated for the Decent Homes
criteria. Is that your view of the situation as well? Do you agree
with the Audit Commission?
Keith Hill: Look: there is not
an endeavouring government that is not subject to every interested
party or stakeholder, as they say nowadays, coming at it for more
money. It is what they do, is it not? The reality is that I am
sure that the Audit Commission is looking at the global figures
and saying that programmes in place are not going to meet those
targets. Again, I really would like to have a look at the hard
criteria that they are using in relation to a rather general,
though very important, concept, like sustainable communities.
Of course, one always has to enter the caveat that it is for the
Chancellor to make decisions about further spending commitments,
though this is such a central commitment on the part of Government
that one would hope that the programme would be sustained. Again,
at the end of the day it is a matter of finite resource and we
will do what we have to do to the best of our financial abilities
and we will make the case as hard as possible. I once remember
going through the division lobby and, as you will know, a minister
can hardly take a step in the division lobby without a colleague
cornering him or her to ask for something on behalf of their constituency,
and as I got to the clerk's desk I found myself side by side with
the Chancellor of the Exchequer who had obviously been doorstepped
in his progress through the division lobby, and I heard him say
to himself, "Another day, another demand". It is like
that: another day, another demand, but we have to try and cope
with all of the demands which come at us.
Q511 Mr Betts: Can we go on to housing
management? It appears to be your aim that the management of housing
should be separated out from housing strategy in every single
case. Is that essentially therefore part of a strategy to get
all council housing transferred to either housing association
management or to an ALMO?
Keith Hill: I do not think you
are right to say that it is our objective to get the management
of housing stock separated out from the local authority.
Q512 Mr Betts: From housing strategy,
and therefore presumably you want to transfer the lot.
Keith Hill: Just for the record,
it is worth bearing in mind that something like, as I understand
it, 100 local housing authorities have concluded that they can
fund the Decent Homes Programme through their mainstream funding
programme and therefore there is not that sort of inevitable separation
that you implied there. However, what we are pretty clear about
is that we want to drive up performance, we want to drive up the
service to tenants. In many cases local authorities are not delivering
for tenants as well as they ought to be and where we put in extra
resource we do expect better performance. We are confident that
the various options available will guarantee to tenants better
delivery.
Q513 Mr Betts: The Audit Commission said
that a few laws are making very good progress on the way that
they are managing their stock in-house so should those better
performing authorities not be able to have perhaps a more equal
financial footing, say, compared with an ALMO, the same rights
to go out and borrow and improve their housing stock?
Keith Hill: No authority is so
perfect that it cannot improve its performance to tenants and
we are absolutely clear on the evidence that we have seen that
where one or another of the options available are applied that
does lead to an improvement not only in the resource which is
quite clearly going into housing stock but also in the performance
of the management structure with regard to tenants. We are absolutely
clear that the benefits of ALMO, of the transfer arrangements,
the PFIs, will see not only increased resource but also better
performance.
Q514 Mr Betts: Where an authority is
managing well in-house, where it is a high performing authority,
should it not be able to retain its stock and invest in it on
the same basis as an ALMO? Will the Prudential borrowing regime,
when it comes in, make a more level playing field in terms of
tenants that choose to remain with the authority and keep the
stock in-house?
Keith Hill: It depends what you
mean by "a high performing authority". If you look at
the CPA, 127 of the 256 housing authorities have been scrutinised
so far under that CPA process, and out of those something like
nine have been identified as three-star housing authorities, of
which seven are already engaged in the ALMO process. The reality
is that well performing housing authorities not only are content
to go down the options appraisal route but also to seize the opportunity.
That is the evidence.
Q515 Mr Betts: Will the Prudential borrowing
though create a more level playing field? Will it give an authority
the opportunity to be able to construct a financial regime very
similar to that which would exist if it created an ALMO?
Keith Hill: As I understand it,
the Prudential borrowing regime obviously provides opportunities
to well-performing councils and obviously they will want to look
at the opportunities which are available to them, but I recur
to my observation that in housing well-performing councils see
the opportunities and advantages of the options process and take
those advantages and I do not see that there is an urgent demand
for the Government changing its policy towards those high-performing
councils. Let me also say that the CPA process identifies the
problems in housing delivery. Of that 127 which have been subject
to the CPA process 47 are rated two-star—opportunities for
improvement there, 46 are rated one-star—clear opportunities
for improvement there, and 16 have no stars at all. That reinforces
the Government's perception that there is ample scope for improvement
in performance by local authorities which we are keen to encourage
in relation to the availability of extra resource.
Q516 Mr Betts: I was trying to get at
whether the Prudential borrowing would allow the resources to
provide for the improvement.
Keith Hill: You will remember
what Harold Wilson used to say: "I never answer hypothetical
questions". At the moment, since the issue has not presented
itself in an immediate fashion I have to regard that as a hypothetical
question.
Q517 Mr Betts: Let us look at an issue
that has presented itself, because the Audit Commission again
raised this with us when we heard evidence from them. If there
is not a level playing field between keeping the stock in-house
and transferring it to some other body, there is also not a level
playing field between transferring to an ALMO and transferring
to a housing association because the borrowing regimes for the
two are different. Indeed, I understand that the Deputy Prime
Minister has in the past made reference to the possibility at
some stage in the future of ALMOs being able to borrow against
their rental stream, which is something that the Audit Commission
has said that they would like to examine as well. Is that something
on your agenda?
Keith Hill: I have seen the debate
about the possibility of ALMOs having powers to borrow, but that
is certainly not an immediate matter before me as the Housing
Minister. I hear what my Honourable Friend says about what the
Deputy Prime Minister has said. Off hand I cannot concretely identify
that observation, so it is difficult for me to respond to that
one. What I will say is that quite clearly, with the new Prudential
borrowing regime, we are into a new area and we will have to assess
the implications of it.
Q518 Chairman: Given that local authorities
are going to have to make decisions in April 2004, it may be a
hypothetical question now but it is going to be a pretty pressing
question for some of them, is it not, so when do you think you
might be able to answer that question?
Keith Hill: The short answer is,
I do not know, but let me undertake to write to the Committee
on that subject.
Q519 Mr Clelland: Can you explain why
you have decided not to allow local authorities to directly invest
in housing through investment allowances which were originally
suggested by your department?
Keith Hill: I am not sure that
I can myself answer that question. Let me turn to my guru.
Ms Kirkham: I think the housing
allowances that you were referring to were something that were
floated in what we called the blue skies debate a couple of years
ago and there was not in response to that fairly wide debate very
much interest shown in that as a particular option. At the same
time as that debate was going on we conducted the PSA Plus Review
where one of the very clear conclusions from a wide range of stakeholders
was that what Government should perhaps be doing was narrowing
down and focusing on the options that would deliver and that were
going to be there and put on the table and not consistently having
an alternative here or an alternative there because local authorities
were saying to us, "That is confusing. We are not quite sure
what might be coming up", and so at that point we decided
we would go for the three options as the Minister has already
explained.
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