Examination of Witnesses (Questions 280-299)
RT HON
KEITH HILL
MP, RT HON
NICK RAYNSFORD
MP, MR JOE
MONTGOMERY AND
MR ANDREW
WELLS
19 OCTOBER 2004
Q280 Sir Paul Beresford: It can be seen
as a sleight of hand, because, of course, the local authorities
will not have a say. The money goes through them so they pick
up the blame, where there is blame, and there will be plenty of
that, I suspect, but actually the fault lies at the Department?
Mr Raynsford: In practice, under
the passporting regime, there have been repeated debates between
individual local authorities and Government about the extent to
which passporting is desirable, possible and compatible with other
responsibilities. In practice, a very, very high percentage of
the sums allocated by the Department for Education and Skills
has been passported in recent years, in fact in some years the
amount has exceeded 100% because authorities themselves have gone
beyond the formal passporting requirement.
Q281 Sir Paul Beresford: Why did not
the Department just become open about it and take it out completely?
Mr Raynsford: Because there is
a real benefit in local authority engagement, and that is where
I do disagree with Clive Betts's point that the Department for
Education and Skills is going to be funding schools directly,
as the money does pass through local authorities. There is an
important relationship between local authorities and schools.
Local authorities provide a large number of services, whether
that is in relation to special educational needs, school transport,
pupil withdrawal units and other arrangements which are organised
by the education authority on behalf of a range of different schools.
Those relationships continue and they are important relationships.
Q282 Mr Betts: In terms of previous discussions,
Minister, and I am about to reflect back on them, the Government
seemed to have two positions. One was that passporting was not
the same as ring-fencing and, secondly, the Government was committed
to reduce the amount of ring-fencing. There has been a significant
change of policy, has there not, in this term?
Mr Raynsford: In relation to schools
funding, yes, there has been. There will now be ring-fencing and
that is a change of policy. In relation to the rest of local government
finance, we remain on course to reduce the proportion of funding
that is ring-fenced to below 10% in the coming year. The schools
ring-fence does not come into effect until the year after that.
I accept there will be a change of policy at that point, but in
the meantime we are still working to reduce the overall proportion
of Revenue Support Grant that is ring-fenced, and we are succeeding,
we are reducing that.
Q283 Mr Betts: I am sure you are aware
of the concerns, I think in many local authorities, that education
is now ring-fenced, social services expenditure is passported
and there are restrictions on how that can be spent, at least
the extra funding there, which is welcome, but there are restrictions
on how it can be spent. The rest of local authority funding therefore
has been squeezed, in some cases the housing function has gone
and there is very little room for manoeuvre, in terms of the built
environment, in cleansing and all those sorts of services, actually
to do anything significant to improve them. Is that a feeling
which comes back fairly strongly from local government to you?
Mr Raynsford: No. I think I would
put a very different gloss on this. The context you have got to
remember is that over the last seven years we have increased funding
for local authorities by 30% in real terms. That followed a period
of time under the previous Government when local authorities saw
real-term cuts in their overall grant, and that is a very different
environment. I accept entirely that the pressures to put additional
funding into specific services, whether that be education, social
care or other services, does create tensions for local authorities.
I do not in any way resile from that. We believe it is possible
for local authorities to budget prudently, to ensure that there
are improvements in services and that they can meet their wider
obligations, and we are working to ensure that happens.
Q284 Mr Sanders: This Committee was very
pleased that the Government amended the Housing Bill in relation
to empty homes and allowing local authorities the right to issue
compulsory management orders on long-term empty homes. How will
this system operate and how many homes are likely to be affected?
Mr Hill: Of course, I was also
pleased to be able to respond to a variety of representations
to lay the amendments in relation to empty homes, which certainly
has been widely welcomed. I think you will understand that the
detail of implementation needs to be worked out very carefully
with local government, and that work is going forward along with
our work with the Empty Homes Agency as well. In terms of the
numbers, we calculate that there are potentially 300,000 empty
homes which may fall within the ambit of the scheme, 60,000 of
them in London. Quite clearly, this is a programme which will
take some time to implement but we are confident that over time
it will make a helpful contribution to deal with issues of homelessness
in London and elsewhere.
Q285 Mr Sanders: What about the structure
of the financing of the empty home management orders?
Mr Hill: I am simply not in a
position to answer in detail on those issues at this stage.
Q286 Mr Sanders: Are you able to give
an indication as to whether the measure will be cost-neutral for
local authorities when they issue those orders?
Mr Hill: I am afraid that I am
simply not in a position to assist you on those detailed questions
of this sort. I will certainly happily supply you with a note
which updates you on the development of our thinking so far.
Q287 Chairman: Could you tell us perhaps
in that note, or now, when you expect the first orders to be possible?
Mr Hill: Yes, certainly, I will
attempt to do that.
Q288 Chairman: There are obvious advantages
if you announce publicly that you expect them to be available
in 12 months' time. Quite a few people who may be wondering whether
they are going to be subject to those orders may decide actually
they do not want to be subject to those orders and get on and
do the leasing themselves, may they not?
Mr Hill: As usual, Chairman, you
are absolutely right.
Q289 Christine Russell: The Starter Home
Initiative. Have you met your targets for the Starter Home Initiative
for housing key workers?
Mr Hill: Yes. In fact, we have
more than hit our target. The target was 9,000 and we have delivered
10,000, so we are pretty happy with that and so are the key workers
concerned.
Q290 Christine Russell: Have you done
any analysis as to whether really it has been effective in helping
to recruit and retain staff? I am not saying it has not worked
as far as housing key workers, but have you done any analysis?
Mr Hill: That analysis we would
expect to be carried out by the other government departments with
whom we are working on that. It is not an evasion on our part,
but, in a sense, ODPM's housing function essentially is a delivery
mechanism on the key worker programme, but we have left it to
other government departments obviously to identify where the challenges
are, in terms of recruitment and retention. The fact that they
have been very happy to continue to work with us suggests that
they have identified it as a successful programme, and of course
we have widened some of the categories of key worker who can be
embraced in the programme now.
Q291 Christine Russell: That was going
to be my next question, whether or not you have received any representations
along the lines of, for instance, perhaps in the Health Service,
maybe you should be including people like hospital porters as
much as nurses, and in schools classroom assistants. Have you
had those representations from the Department of Health or the
DfES?
Mr Hill: I do not think we have
had those representations from the DoH. Certainly we have had
representations about the need to broaden the categories, which
we have done, but I do not believe that we have received representations
about such auxiliary workers. I can only presume that is because
the Department does not identify key issues of retention and recruitment
in those particular occupations.
Q292 Christine Russell: What about rolling
out the key worker initiative to other parts of the country?
Mr Hill: Again, you will recall
that, in addition to London and the wider South East, in response
to Mr Sanders, I pointed out that the programme applied to the
South West to the tune of £10 million. We have not rolled
it out to other parts of the country because other government
departments have not identified key issues around recruitment
and retention in other parts of the country.
Q293 Christine Russell: Could you tell
us perhaps more about the new scheme which the Deputy Prime Minister
has announced for £60,000 mortgages to enable first-time
buyers to get on the first rung of the housing ladder?
Mr Hill: Yes, we were very pleased
to be able to make that announcement at the Party Conference on
26 September. It was the product of a good deal of intensive work
with English Partnerships, with the Housing Corporation, with
developers as well. The principle, as you know, is the principle
of maintaining, as it were, community land in trust and we would
expect English Partnerships and local authorities to come forward
with offers of land. We are confident that the £60,000 target
can be met in terms of construction costs, and we are expecting
English Partnerships to announce shortly a competition to developers
both here and abroad to offer new homes on that basis.
Q294 Christine Russell: The development
of these proposals will not be restricted to London and the South
East, it will be across the country?
Mr Hill: Yes, wherever it seems
appropriate.
Q295 Chairman: What is the target date
for the first person moving into one of these properties?
Mr Hill: As soon as possible,
Chairman.
Q296 Chairman: Nothing more specific?
Mr Hill: As my esteemed ministerial
colleague points out, it is only a month, actually it is only
three weeks since we announced the scheme, so give us a break.
More seriously, let me say that, of course, we recognise the importance
and urgency of this scheme, and I am anxious personally to offer
some tangible results on this, genuinely, at the earliest opportunity.
Q297 Mr Betts: Tenancy deposits. The
Committee is extremely pleased that the Government have decided
to bring in a scheme. Could the Minister explain just a little
bit where we are up to with this now and say whether a decision
has been taken yet as to the precise nature of the scheme?
Mr Hill: On that one, we have
made a good deal of progress. This was an area where already very
great detailed work had gone on. Again, the detail of the scheme
will be a matter for regulation in due course. I cannot actually
identify a date at which we expect to be able to bring in those
regulations but I think we are looking really at a very early
start. My notes actually say: "Tenancy deposit schemes to
follow." It is one of those cases of, "You're on your
own now, Minister." I cannot tell you that but I will write
to you. Genuinely, we are very keen on doing this. Twenty per
cent of tenants identify problems with the withholding of deposits.
We recognise that this affects literally tens of thousands of
our fellow citizens each year and we are anxious to move and we
believe we can move on this at a very early point.
Q298 Chairman: A note to follow, is that
it?
Mr Hill: A note to follow, absolutely.
Q299 Mr Betts: Has a decision been made
yet on the format of the scheme, whether it is going to be a deposit
held by a third party or a requirement for landlords to be insured
to make sure that tenants get their deposits back if there is
a failure? They would seem to be the two main ways to proceed
with those. I wonder whether the Government have reached a view
on that yet, following consultation, on when it will happen?
Mr Hill: You are absolutely right.
We are looking at a kind of ABTA-like scheme whereby landlords
are required to register and to put monies into a fund held by
a third party, so that the delivery to tenants upon judgment will
be as immediate as possible.
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