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Westminster Hall
Wednesday 29 June 2005
[Mr. Roger Gale in the Chair]
Council Housing
Motion made and Question proposed, That the sitting be now adjourned.—[Alan Campbell.]
9.30 am
Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): I am pleased to have secured this important debate, but I am extremely sorry that it will create criticism of the Government whom I have been delighted to support in so much of what they have been able to do. It coincides with two important reports, which both reinforce the dire need to review and turn round Government housing policy. New Labour might call this policy a failed or a failing one.
The report of the House of Commons council housing group puts the case straightforwardly for a fair allocation of funding, both for revenue and capital, for the provision of council housing. That refers to rented housing owned and managed by our local authorities. The report is based on the views of those much neglected people, the tenants of our local authorities.
My right hon. Friend the Prime Minister declared that he wants to listen to the voices of the people. This morning he has the perfect opportunity to do so. For if we use tenure as a surrogate for class, we can see that the mass of people—the C2s—who remained at home on 5 May came predominately from our council estates. They were baffled and bemused as to why a Labour Government should be so unashamedly trying to undermine perhaps the greatest of our post-war achievements in the provision of public housing—the greatest single measure that has produced good policies on public health in our country. They cannot understand why a Labour Governments would be withdrawing support from councils and their tenants.
The second report comes from the Audit Commission. It calls on the Government to review the housing subsidy system in the light of the commission's findings, the most important of which is the conclusion that council housing broadly pays for itself. That message should go out. The report further points out, as does the report by the Defend Council Housing group, that many councils more than meet their costs and that the Government then remove the surplus in order to meet the costs of those councils that have deficits. The reason some councils produce deficits on their rent account is simply that their tenants are too poor. So we have the disgraceful spectacle of the less well-off subsidising the least well-off in our society.
David Taylor (North-West Leicestershire) (Lab/Co-op): Does my hon. Friend agree that the second point to which he referred, that of the Audit Commission, has particular force? It does not come from the stance of the Defend Council Housing group or that of the House of Commons council housing group, which want to promote council housing. It takes an objective
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hard-eyed stance about where we are going on housing. Is that not the worrying factor from the Government's point of view?
Mr. Purchase : My hon. Friend makes a good point. I have rarely come across people from the accountancy profession, particularly those who work at that level, who are national council house supporters. If they reach the conclusion that the review is necessary, we can take it that there might be something in it. That is what we hope to persuade the Government of this morning.
On subsidising the least well-off by the less well-off, I want to tell the Minister and the Government that a cardinal principle of socialism and also of every Labour Government since the war is that poverty is to be remitted from the centre by general taxation. Council housing finance at the moment is a throw back to the outdoor relief introduced by the Elizabeth I. We are in the reign of Elizabeth II and the daylight robbery of council tenants disgraces us all.
Let me offer a few statistics as a background to our debate. After successive assaults on housing shortages in the post-war period, by 1979 England had a crude housing surplus. By that, I mean that nationally there were more dwellings available than families wanting them. Regional variations still needed considerable attention, especially in areas such as London, and disrepair, especially in the private rented sector, was serious. At that point of crude surplus, there were more than 5 million homes under the ownership and management of local authorities. Today, after the sale of 2.8 million council homes, there are fewer than 2.5 million. That is by no means compensated for by a growth in either the housing association or private rented sectors. There are 1.3 million fewer homes available for rent now than in 1979. No wonder there is a problem.
Of course, it is true that owner-occupation has grown, but the truth is that many people have been pushed into buying houses that they can scarcely afford and, in years to come, we shall see that such marginally viable owner-occupation will produce levels of disrepair that will result in the need for a massive injection of funds, probably from the public purse and the taxpayer.
Kelvin Hopkins (Luton, North) (Lab): My hon. Friend makes an important point about people being forced into the marginally viable owner-occupied sector. With a slight downturn in the economy, some of those people become unemployed. Then they lose their homes, which are repossessed. Ten years ago, that factor destroyed a Conservative Government; it could seriously damage a Labour Government if we are not careful.
Mr. Purchase : The point is well made. Many in this Chamber will have dealt with the tears of their constituents during that dreadful period when housing costs rose astronomically on the back of increasing—ever-rising, it seemed at the time—interest rates. That scenario will always threaten those pushed into what I call marginal home ownership.
Figures from the Library show that the number of people registered for council housing has increased by 40 per cent. since 1997. That means that more than
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300,000 more families are waiting. According to the Library, the waiting list now stands at a staggering 1,434,000 families.
Bob Russell (Colchester) (LD): Does the hon. Gentleman accept that that figure is artificially low because it is difficult for many low-income families to get on the so-called waiting list?
Mr. Purchase : Yes. It is my understanding that that problem exists. I will deal with that a little later. However, that is the figure provided by the Library and I think that it will bear scrutiny.
Joan Walley (Stoke-on-Trent, North) (Lab): In Stoke-on-Trent, the council housing waiting list is 6,000 and there are 2,000 vacancies, so that means that there are about three people for every vacancy. The issue is not just the Library figures; we are talking about real people in real communities throughout the country and their need for there to be investment in council housing on a level playing field.
Mr. Purchase : I am grateful for my hon. Friend's comments. I hope to deal with that very point in a moment.
The families accepted as homeless just last year numbered 30,000. I have written to my right hon. Friend the Prime Minister to tell him that that is unacceptable while a Labour Government are in power. Behind those cold statistics and the Audit Commission's report lie the stories of despair revealed in our Defend Council Housing report. My hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) has just mentioned that in relation to her constituency. Members learn every week of greater and greater distress among their constituents. On Friday, at my advice session, I met a woman with three children—not uncommon, people might say. She lives—or should I say exists—in a run-down private let. One bedroom is in such disrepair that it is uninhabitable. The rent is £120 per week. Those responsible for housing benefit say that it should not be more than £100 a week, and that limits her entitlement. She cannot pay the landlord the other £20; she simply does not have it. Nevertheless, every week taxpayers pick up a bill for twice the amount that it would cost if my constituent could get a council house.
Nationally, unregulated tenancies attract a housing benefit subsidy of at least half as much again as council tenancies. In London, that subsidy can be three or four times greater. That additional subsidy is fast becoming worth £1 billion a year, and it is going straight into the pockets of private landlords, some no better than latter-day Rachmans. At least with housing benefit paid to council tenants, taxpayers' money remains in the public purse, albeit brokered through the housing revenue account.
The financial aspects of my constituent's plight, and indeed the national financial position, has a much worse dimension to it. My constituent's partner, who is the father of one of her children, wants to take up his responsibility as a father, and indeed wants to take on fatherly duties in respect of her other children, but there
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is a problem: he is working. He works hard for a relatively modest wage that would disqualify him and the mother of his child from housing benefit if he moved in with her. His wage does not allow him to pay £120 a week in rent and to do all that he wants for the children.
My constituent has applied for a council tenancy, which she and her partner could afford together, but she has been told that she is not homeless, notwithstanding the pit that she lives in. As she is not homeless, she has no priority for a council tenancy. This is the housing situation in England in the 21st century. For all that the Government trumpet their anti-poverty strategies and successes—I, for one, want to blow that trumpet as loud as my right hon. Friend the Prime Minister—I find that my trumpet is muted when confronted with a policy that keeps a decent family apart.
It is not coincidental that the rise in such sad situations is matched by the fall in the number of council houses. The case for keeping this greatest asset in good repair, and for beginning to rebuild what has been lost, is overwhelming in human terms and undeniable in financial terms. I have a few more statistics. The cost of transferring 44,500 dwellings in just two years under the stock transfer options was £488 million in central Government grants. It was needed to make up so-called negative values—the overhang, the gap funding, call it what you will. That is £488 million that is now not available to local authorities, although it is available to private concerns or housing associations. What is the big purpose behind all that? It can only be a visceral dislike of local authorities and perhaps their tenants.
Continuing council house sales produced £2 billion in cash in 2003–04, but councils were allowed to keep and spend just over a quarter of that amount. In essence, that is taxpayers' and ratepayers'—remember that term?—historical investment in local housing. Now it is being used for national purposes, and is robbing communities of the means to house those families in their midst in need of a roof over their head. The report of the council housing group makes recommendations that will help a Labour Government to start to win back its former well-deserved reputation as the true friend of the council tenant.
Tony Crosland once described housing finance as a dog's breakfast, and he set about reform. It resulted in a detailed proposal, the housing finance review of 1978–79. Alas, this plan, which would have encouraged both owner-occupation and a rational approach to investment in the council sector, both for revenue and capital, was taken over by the Thatcher Government. The mechanism that we had worked up, known as the housing investment and strategy programme, was rearranged to divert such funding as there was into housing associations and other agents. Councils were left to struggle with ever-growing disrepair of their stock. In 1999 the Government identified disrepair standing at £19 billion, and declared their honourable intention to introduce and fund a decent homes standard. However, by doing a Thatcher and cutting out local authorities from the plan, new Labour has made a fundamental error.
It is not too late to embrace the fourth option, but time is pressing in a deadly manner for the homeless and the badly housed in our constituencies. I urge the Government to accept the advice of the Audit Commission to review its housing finance policy in
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much the way that Crosland did and, above all, to pay attention to the tenants' representatives who have given their support to the fourth option.
Mr. Roger Gale (in the Chair) : Order. Before we proceed, many Members have asked to speak and a number of others who have joined us this morning without writing to Mr. Speaker are already rising. I urge all hon. Members to keep their remarks as brief as possible to enable me to accommodate the maximum number.
The occupants of the Front Benches have indicated that they are prepared to restrict their comments. Accordingly, I propose to start calling them at 10.40 am.
9.46 am
Paul Holmes (Chesterfield) (LD): I congratulate the hon. Member for Wolverhampton, North-East (Mr. Purchase) on securing this important debate, which a number of Members were trying to secure.
May I recommend to the Minister that in his urgent bedtime reading tonight is the report of the Defend Council Housing group—of which I have the pleasure of being the vice-chairman—the Audit Commission report published last week that described the system of funding for council housing as perverse, the Public Accounts Committee report that criticised the inequitable funding system that the Government have introduced and the report of the Select Committee on the Office of the Deputy Prime Minister, which contained the same message.
A few weeks ago at the start of the Session, 45 Bills were introduced into Parliament, not one of which addressed the scandal of this Government's policies on council housing, which starve councils of the money and ability to build new social housing, rob councils of their tenants' rental income and try to force tenants into a shotgun divorce by saying, "You can exercise the right to choose to stay with the council as your landlord, but over the years that will mean that your houses and estates will decline as the Government withhold finance."
I shall use the borough council in my constituency as an example, but this example could be repeated in scores of councils throughout the country: in Birmingham, Camden, Southwark, North-East Derbyshire, Cambridge and Bolsover, and many other areas. The details will differ slightly, but the principles are exactly the same. A quarter of the houses in my constituency are still council houses—that is 10,000 houses, and would be 20,000 but for the right-to-buy policies over the past 15 years or so. It is therefore a major issue for almost one in four of my constituents. As council housing stock falls every year due to the right to buy, so the waiting list for family houses increases. Can the council build new family houses? Effectively, no. As the population ages so the waiting list for old age pensioners' bungalows increases, but can the council do anything to meet that demand? Effectively, no, because of Government policies.
Instead, the council in Chesterfield, like all other councils in the country, is required by Government diktat to have by the end of next month—July 2005— employed independent consultants to analyse the housing stock and the finances and to consult and survey tenant opinion prior to a possible stock transfer
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ballot. The cost of that process so far in Chesterfield is approaching £250,000 in payments to the independent consultants and the time of the staff in the council housing department. If the process went through to a full ballot by spring next year, the cost would be about £500,000, which is money that could far more effectively be invested in the council housing stock.
At the end of that process a choice may be offered to council tenants—a Hobson's choice—with them being told, "You can switch to a housing association or a private finance initiative landlord and there will be no financial problems in terms of improving and maintaining your houses and estates into the future. Now, there will be drawbacks. You will have less secure tenancies and you may have a remote landlord, because many of the housing associations that start off as very local are taking part in a wave of mergers across the country and becoming large national organisations. So your local housing association office might end up being somewhere else in the country." I know from housing associations in Chesterfield that some are very good and very local, but some are not very good, distant and hard to get hold of.
One difference with a housing association is that when a transfer has been made it cannot be changed. The housing association cannot be voted out for a new landlord.
Kelvin Hopkins : Has the hon. Gentleman had the same experience as I have with housing associations in that many of their tenants tell me to tell council tenants not to vote for stock transfer, whatever they do?
Paul Holmes : That is not the experience in Chesterfield because we have not gone through that process yet, but when going around the country and talking to people, including housing association tenants, I have certainly heard that from people who have undergone the transfer process.
With this Government, tenants have the alternative choice of staying with the council, but they see the money run out over five, 10 or 15 years, and the quality of their houses, estates and management declines. A particular problem in Chesterfield is that a decent minimum housing standard can be achieved quite easily by 2010 because Chesterfield's standard is well above the Government's minimum. The problem will be retention because over the years our tenants will see a decline from the present high standards down to minimum levels due to the funding regime imposed by the Government.
Why should that happen and why can the council not provide the same level of repairs, modernisation and estate management as a housing association or private landlord? Is it because they are less well run? That is certainly not true in Chesterfield, although it may have been to 2002, when the housing department received a bad report from Government inspectors, but in May 2003 council tenants changed their landlord—they could not have done that if they had switched to a housing association or private finance initiative manager—when they elected a Liberal Democrat council and there were considerable changes. I am not making a party political point because other hon. Members will say the same in reverse based on their experience in other parts of the country.
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The point is that tenants can change their management if their housing is run by the council. Satisfaction ratings of 58 per cent. back in 2002 are now 84 per cent. Repairs that took an average of six weeks to be carried out now take an average of four days. Appointments for repairs have been introduced, but none existed before. Re-let times have fallen from 45 days to 29 days. The number of voids are down and the level of rent collection has risen. There has been a range of increases using the same management and housing department staff as before. There was no need to bring in outside contractors and consultants, PFI, private expertise or housing associations. The new management on the council simply allowed the housing department staff to get on with their job. Management expertise exists and privatisation is not necessary to achieve it.
Is the reason financial? Many examples have been documented in the Public Accounts Committee's reports and the Defend Council Housing campaign's report that came out last week. There are many examples of debt write-off and so on. I shall give two small and simple examples.
In Chesterfield every year the Government claw back about 14 per cent. of the rent that council tenants pay in Chesterfield. That money is paid by Chesterfield council tenants to the council housing department and taken by the Government to spend elsewhere. During the past financial year that amounted to £3.2 million from an income of £22 million. If Chesterfield council were allowed to keep just half of that £3 million to £4 million that is taken away every year, it would have no problems whatever for the next 30 years in maintaining a high standard of council housing. However, because the money is taken away, over the next five, 10 or 15 years it will struggle and have to impose charges simply to raise £500,000 just to keep afloat on an even keel.
The same applies to the right to buy. Every year, money comes in from the right to buy. Last year, Chesterfield received £8 million, of which £6 million was taken by the Government to spend elsewhere. Only £2 million was retained in Chesterfield to reinvest in council property. Again, if just half of the money that was taken away was left with Chesterfield, it would make all the difference not only in maintaining the existing stock, but to building new housing, particularly old folks' bungalows.
Why do the Government pursue these policies? I asked that question at Prime Minister's questions on 8 December last year, but was simply told that we should celebrate choice. I do celebrate choice and if council tenants choose to leave the council, that is their choice and is fine. I would respect and support that because I have seen enough badly run council estates throughout the country. I grew up in a council flat.
John Hemming (Birmingham, Yardley) (LD): Does my hon. Friend agree that the present housing crisis is predicted to become worse in terms of low-cost social housing for rent? The evidence is that the Government's policy is driven by them wanting to abdicate responsibility for housing.
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Paul Holmes : I have much sympathy with that point of view. If I were to go off at a tangent, I could mention various other areas of Government policy—such as trying to help young couples to get on to the housing ladder through the private sector and a number of Government initiatives.
On the right to buy, I remember that when I was first elected as a councillor in Chesterfield in 1987, Labour councillors bitterly complained about that policy, which a Conservative Government had introduced. I said to them, "But surely if your party had introduced that policy, you would have welcomed it as a great method of socialist redistribution of wealth. The council uses public money to build houses; people rent those houses for a number of years; they then get a discount on buying their houses; and people who otherwise would never have been able to afford to get on to the housing ladder, or who would never have even thought of getting on to it, are able to do so if they so wish." Therefore, in principle, I have no objection to that policy either. The Government are now trying to encourage people in the private sector to get on to the housing ladder, at a time when the housing market is incredibly expensive. Is there a simpler way to address this issue than to allow proper provision of social housing through that tried-and-trusted method of the last century, council housing?
At Prime Minister's questions and through written questions, I have asked why the Government are pursuing this policy when all the reports, all the finances, all the logic and the democratic choice are against it. Time and again we get the answer that we should celebrate choice. Yes, there should be choice. Council tenants should be able to choose to leave council management, but it must be choice on a level playing field rather than the loaded system that the Government currently impose. Given that level playing field, most council tenants would choose not to leave the secure landlord who provides good housing and who they have known for a long time. Even in some areas—Birmingham and Camden, for example—where the council has recommended that the only way forward is for estates to leave the council, tenants have voted in huge numbers not to do so. Therefore, if there were choice on a level playing field, I have no doubt that most council estates would never choose to transfer.
The Government seem to be oblivious to that; I hope that the Minister can reassure us that that is not the case. The Government tell us time and again that no fourth option is being considered. They told us that most recently only a month ago, on 23 May, in answers I received to a series of questions that I had asked. One response was:
"The Office of the Deputy Prime Minister has no plans to change the funding mechanism for councils whose tenants vote for their housing to remain under both council ownership and direct management."
"There are no current plans to change the housing revenue account subsidy system."—[Official Report, House of Commons, 23 May 2005; Vol. 434, c. 33–36.]
It seems that the Government are set on continuing their unfair, divisive and undemocratic policy.
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The money is there if people stay with the council, if the Government give them equality. If by next autumn every council tenant had switched to a housing association or a private finance initiative landlord, the money would be made available. If they stay with the council, the money is denied. Therefore, the money is available; it is simply denied to certain tenants who choose what in the Government's eyes is the wrong option.
The necessary management skills are also there, as we have seen in Chesterfield in the past two years. The customer satisfaction is there, too; there is 84 per cent. satisfaction in Chesterfield. Council tenants in Chesterfield will not forgive a Labour Government who refuse to respect their democratic choice and treat them equally with private tenants, and they will never forgive the Labour party locally or nationally if it lets a Labour Government get away with this abuse of democratic choice.
I hope that the Minister will not repeat the platitudes that I have heard in the past year or so about celebrating choice when, in fact, the Government deny that very choice. I hope that the Government will heed the report of the Office of the Deputy Prime Minister Committee, the Public Accounts Committee, the Audit Commission and the Defend Council Housing group report, and rethink their policies.
Mr. Roger Gale (in the Chair): Order. Once again, I urge Members to keep their speeches as brief as possible. If Members can curtail their remarks to five minutes in length, I can probably accommodate all Members who are rising. At the current rate of progress, only half the Members rising will be called.
9.59 am
Dr. Brian Iddon (Bolton, South-East) (Lab): Many hon. Members present served on housing committees—I did so for 21 years, with 10 years as chairman of the Bolton housing committee—so there is a lot of experience in the Chamber. It is clear that there are strong feelings about stock transfer. That was shown in a resolution at last year's Labour party conference, which was passed by a large majority and which has not been satisfactorily answered. Those strong feelings have been expressed by the Members who have spoken in this debate, who have a wealth of experience of serving on housing committees. I hope that the Minister takes that into account because, frankly, 90 minutes is not long enough to debate what is one of the most important subjects in the land. We need a full half-day debate on the future of council housing
Bolton council decided to form a unique regeneration arm's length management organisation—much to the reluctance of the tenants, I have to say. In 1988, the Conservatives brought in large-scale voluntary transfer after their right-to-buy policies were not as successful as they thought they should have been.
In 1986, I took over the chairmanship of the housing committee and one of my first duties was to hold public meetings across Bolton to find out what the tenants wanted. I had 13 public meetings and all the halls around Bolton were packed. There was standing room only. People were even outside the door, unable to get into the hall, but straining to hear the debate between
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me and the Tory opposition spokesperson on large-scale voluntary transfer. The message from Bolton tenants was loud and clear: they did not want to transfer the stock according to the Tory plan of the day. In the end, they transferred to an ALMO, but with great reluctance.
I dedicated 10 years of my life to such things, along with my council colleagues and council officers. We made some excellent appointments; four of the appointees went on to chair leading housing departments in the rest of the country. Within a decade, we had turned around a department that had not been treating its customers well and whose housing direct labour organisation had been in danger of closing. Many were closing at that time; neighbouring Salford lost its HDLO. Within a decade, we had made Bolton's housing department one of the best in the land, and it remained so until the formation of the ALMO.
My first question to the Minister is why there is the same pressure on well performing housing departments to transfer their stock, when, frankly, that is not necessary. Of course, the preferred choice of the day is the ALMO. However, I cannot see any advantage in setting up an ALMO, especially if a housing department is performing well. Why do I think that? The stock stays in the ownership of the council and the financial transactions remain on the Treasury books. Where is the advantage? The Government say that the separation of strategic housing policy from the day-to-day maintenance and management of housing stock is an essential feature of Government policy. Why?
Successive reports have shown that that is not necessary and does not result in greater satisfaction for the tenants of the transferred stock. I ask the Minister to put on record why the Government are forcing councils to transfer their stock, even in the direction of an ALMO.
I now raise a matter of great concern among Members of Parliament. A review of ALMOs has been taking place. The report is about to come out—I hope that it will come out next month. Perhaps the Minister will tell us when that review of ALMO finances is due. We are getting whispers that the ALMOs may transfer completely out of council ownership; two models are being proposed. The tenants, certainly those in Bolton, have never voted even for the formation of an ALMO—they were merely consulted through tenants' groups, many of which do not represent the whole view of the tenants living in the council houses.
To my knowledge, there has been no democratic vote anywhere even for a transfer to an ALMO. If those whispers are true—I ask the Minister to confirm whether they are—and the ALMOs are now to be transferred out of council ownership, will he promise the House that all the tenants in ALMOs at the moment will be given a democratic choice about whether to transfer further? Many of us have argued on various platforms for a long time that the formation of ALMOs is only half of a longer journey. We believe that that longer journey is large-scale voluntary transfer, and many of us are against that.
I shall now pay some attention to how large-scale voluntary transfer votes are carried out. When we were taking evidence for the report that we are debating, we heard some astonishing stories. For example, on the Clapham Park estate in Lambeth, the Electoral Reform
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Society—yes, the Electoral Reform Society, of all organisations—carted a ballot box around door-to-door asking tenants whether they had voted. It had spare ballot papers. If the tenants had not voted, the society produced a ballot paper on the doorstep. That is the sort of vote for large-scale voluntary transfer that is being carried out.
The harassment that is going on is unacceptable in any democracy. At the meeting we held two weeks ago, when the report was launched, four Sefton council workers reported to us that they had been suspended—they are probably still under suspension—for standing outside the transfer shop in the shopping precinct where James Bulger was tragically abducted to tell people why Unison, their union, is and was objecting to stock transfer in Sefton borough. They were suspended for doing that in their own time and supporting Unison policy.
Those are only two examples of the things that are going on.
John Hemming : Will the hon. Gentleman give way?
Dr. Iddon : Because of the time, I shall not take any interventions.
We want to know whether the Minister is aware of the harassment that has been going on in the large-scale voluntary transfer debates and votes. If he is aware of it, what are the Government doing to protect people from harassment?
That harassment may be done by chief officers of the council. Chief officers who transfer to an arm's length management organisation or to a large-scale voluntary transfer organisation, or who take the private finance initiative route get a great promotion. What is the attraction? It is that, when the chief officers transfer, their salaries go up.
Those are the people who are advising the tenants. They are the tenants' friends. Tenants trust their senior officers. They have worked with them for years through the tenant organisations. When the chief executive of a housing department says, "Your best option is to transfer", he or she has an ulterior motive. Some of the salaries that former directors of housing are now earning as chief executives of transferred authorities are exceptional. Some housing association and registered social landlord chief executives earn considerably more than what my right hon. Friend the Prime Minister earns—considerably more than £200,000. Many of them are on salaries of more than £100,000.
I shall finish with this point. I represent a party that I have loved all my life and shall continue to love till my dying day, but it hurts me to see that activity going on under a Labour banner.
10.8 am
Bob Russell (Colchester) (LD): I shall be brief. I sympathise with the Minister because I do not think that he has a single friend here. Nobody has yet suggested that they will oppose Labour party policy. They wish to support Labour party policy on housing. I certainly endorse the thrust of the Labour party's
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council housing policy, which has fluctuated over the years. I recall the days when real Labour rightly condemned the Thatcher Government for what they did with council housing. However, it must be recognised that, no matter how awful the Thatcher Government were, in their first eight years, they built 350,000 council houses. In their first eight years, new Labour has built about 3,000 council houses.
I ask the Minister and his officials to look back at the 90-minute housing debate that I introduced in this Chamber on 11 June 2003, which begins at column 237WH of the Official Report. Many of the things that I said then I have said subsequently in the House in questions directly to the Prime Minister, or to the Deputy Prime Minister. Is it not a shame that the Deputy Prime Minister will not come here to explain his housing policies? In 34 years of elected public office as a local councillor and as a Member of Parliament, I have never seen social housing in such a crisis as it is now.
There was a time when families in Colchester could apply to go on the council house waiting list and the question was how many months they would wait. Now, if they are lucky enough to get on the list at all, it is a question of how many years. In a way, debating stock transfer is almost an academic exercise if people cannot even get on the waiting list for a house.
I spoke to a young couple at my most recent advice surgery. The father is in work, the mother is at home and they have three children. His work involves helping with the massive programme of private house building in Colchester. His wage, along with that of about 35 per cent. of households in Colchester with two wage earners, is insufficient for him to buy the cheapest house on the market. He cannot even rent a decent house. He and his family are in a first-floor, two-bedroom maisonette. He said, "All I want, Mr. Russell, is a family house so that my wife can leave the kitchen door open while my three-year-old son plays in the back garden."
We live in the fourth richest economy in the world. In post-war Britain, Labour and Conservative Governments competed to build the most council houses, and it used to grate on Labour that, more often than not, the Conservatives built more council houses in towns, cities and villages. The massive sell-off of council houses by the Conservatives was opposed by Labour in opposition but is actually encouraged under new Labour. I believe that most, if not all, Labour Members were elected on a Labour party policy to promote social justice and equality, but, in my constituency alone, 4,000 children will go to bed tonight in housing that is deemed to be overcrowded by current standards. They are not homeless but they are living in substandard accommodation.
I invite the Minister to take this message seriously, and to take it back to his boss, who should be here to answer why he is not delivering Labour party policy on council housing.
10.13 am
Nia Griffith (Llanelli) (Lab): There is an alternative. Carmarthenshire county council in Wales consulted its tenants on what future they wanted for their housing stock. The response was 90 per cent. in favour of keeping it in-house and keeping the county council as landlord. That was not because the tenant groups are
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compliant, as anyone who has been to their meetings will know. They are well aware of the shortcomings of the county and are not afraid to articulate their concerns, but they have seen good and bad in local housing associations. They have realised that prioritisation is not the panacea that it was once made out to be. They know that there is no pot of gold at the end of the rainbow. They prefer democratic accountability and know that they can harass their local councillors if they are unhappy. They know that privatisation could mean an absent landlord who absolutely does not care what happens to tenants.
Is Carmarthenshire county council an extremist council that can manipulate its voters and tenant groups? Certainly not. Its area includes the manufacturing town of Llanelli, the edge of a coalfield and a rural hinterland. The council consists of 30-plus independent councillors in alliance with 20-plus Labour councillors. That moderate alliance, which covers a broad spectrum of political opinion, believes firmly—100 per cent.—in keeping the council housing stock under council control. The political will is there.
Is the council's option an easy one? Certainly not. It has had to draw up a 30-year financial plan that will enable it to borrow the appropriate funds to improve to modern expectations and standards a housing stock of some 9,000 houses. Why is the council doing that? Because an overwhelming 90 per cent. of its tenants favour that option. They consider it a fundamental duty of any community, society or government—local government in this case—to provide homes for everyone, and many of them believe that councils have no right to sell off houses that were built with public money to house those in need in the community. Those houses were built with contributions, whether they were rates, rent or taxes, paid for by our parents and grandparents.
The right to buy—what a brilliant piece of political packaging. It puts the policy on a par with human rights. It makes it sound wrong to change the policy to suit changing times. Let us call it an option to buy or a possible option to buy—an option to buy if certain conditions are met.
Carmarthenshire county council is working on six different methods of tackling the lack of affordable housing. One method is to specify that some types of housing in certain shortage areas cannot be sold. We must have the courage of our convictions, and as circumstances change we should not be afraid to change policy and to remove that possible option to buy. We need to keep our remaining stock in council ownership and under council management.
This, my friends, is moderate country; this is chapel country. "When did we see you homeless, Lord?" The answer will be, "When you sold off council housing to line private pockets."
10.16 am
Mr. Austin Mitchell (Great Grimsby) (Lab): I congratulate my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) on having secured this important debate. I hope that my hon. Friend the Minister represents a new regime in the Office of the Deputy Prime Minister, with new Ministers who will bring sensitivity, concern and intelligence to council
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housing. Those factors have been conspicuously lacking from the council house regime. The question is whether Ministers have the courage to change a policy that is essentially one of bullying, bribing and bamboozling councils and council tenants into getting rid of their council houses and privatising them.
Councils and tenants are told: "We, the Government, cannot provide the money to do the £19 billion of repairs that is the backlog of Tory disinvestment in council housing." Actually, £19 billion is the sum that the London School of Economics estimates the new identity card scheme will cost central Government. We cannot afford the decent homes standard, which had been improved in the manifesto, and we cannot afford to turn what had become dumping grounds into communities. We have to get the work from the private sector, and to choose between three options, none of which people particularly want. That is from a Government who encourage choice. They will not give the tenants the choice that they want to make, which is to stay with the council.
Our council house policy is essentially, "Choose between these three options, or rot in hell". It is a disgrace to the Labour party, and every dirty trick in the book is being used to pursue that policy. Ballots have been brought forward, and that trick was used in Sedgefield last week. The ballot was brought forward before an opposing pamphlet could be put out, so tenants voted in the first few days without reading the other side of the case. Appalling, is it not? It could be Iraq, but it is Sedgefield.
Council officers are persuading tenants to vote for privatisation, because the policy will enrich the officers. My council house department seems to have taken a year off handling council housing and repairs to persuade tenants, and some officials are saying, "Vote for privatisation, or we will lose our jobs." That is an appalling situation. In the face of that, only three quarters of those who vote are voting for privatisation.
The procedure is expensive and it is a waste of money. On the evidence of the National Audit Office, it costs £435 in propaganda, in legal fees and in consultants for every council house that is got rid of. That could be used for housing. It is £1,300 cheaper for councils to undertake repairs and renovations than for the private sector, because it pays higher interest rates and higher wages at the top. We are spending millions not to sell but to give away council housing in my area. There is no increase in tenant satisfaction, and the policy does not prove acceptable to one quarter of the ballots. Camden and Birmingham are classic examples where only 22 per cent. of council housing has been transferred by that method since 1988. The arm's length management organisations are under review. Many of us saw them as the halfway house to privatisation. Registered social landlords are not proving adequate. Indeed, many of them have had to be placed under supervision by the Housing Corporation, so inadequate is their administrative system. The Treasury is anxious that they should be combined into super-RSLs, larger ones, which will be out of touch with their localities.
The terms have been relaxed, without performance criteria that were necessary up until now. I notice that in north-east Lincolnshire the new social landlord was promised only £6 million of gap funding and has now been awarded £17 million because it does not have to
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fulfil any performance criteria. The policy is just not working, and I hope that the Minister takes this message back. It is dividing the Labour party and depriving councils of any real role. What are they going to do—in many cases—if they do not run council houses? The Labour party conference voted against the policy by a majority of eight to one, and all I heard in the Deputy Prime Minister's reply was two words—one of which was "off". It is, frankly, a shambles.
It is time for a change. This policy is alienating the council estates on which the Labour party depends and to which we owe a duty to repair, renovate, rebuild and give the best possible conditions. We are failing in that duty. It is time for a change, and time for courage and independence at the Office of the Deputy Prime Minister. We need to change the policy to offer councils a fourth option: investment in council housing. That is all that they want, and it has been obstinately refused. It will not be substantially more expensive.
We need to stop taking money out of housing revenue accounts. The Government have a degree in looting and pillaging that would do credit to a dictator in a banana republic. Taking money out of housing revenue—[Interruption.] The Minister shakes his head in disagreement, but they have already taken £13 billion out of housing revenue accounts to pay for daylight robbery—the housing benefit of other council tenants.
The right-to-buy revenues that were supposed to go back into housing do not always do so. Councils are asked to carry a burden of historic debt. We do not ask people going to hospital to pay the historic debts of the health service, but we ask council house tenants to pay the historic debts of councils. If we consider the average council house rent of £2,650, only £1,770 goes to back to council housing. The rest is extracted by Government. Much of it is redistributed from north to south, which is something that I resent.
All that the Government have to do is stop siphoning money out; allow councils to keep the right-to-buy revenues that amount to £0.5 billion; allow prudent borrowing on a revenue stream, such as management and maintenance or the major repairs allowance; and perhaps, in the most desperate situations, provide some of the money that has been wasted on privatisation endeavours. They should turn what they call their community housing task force—it is actually a front organisation for privatisation; a privatisation hit squad essentially—into a council house improvement task force. That is all we are asking. It is time for a change.
The Audit Commission report last week points in the direction of that change. It says:
"Both the capital and revenue funding systems are unsustainable. As more councils transfer their stock, there is less income to redistribute and there is an ongoing gap in capital funding, particularly where there are serious housing problems. Additional investment will be necessary in those areas."
It is crunch time and the Government must make a decision. That decision should be to allow those councils and tenants who want to stay with the council to do so and have their housing properly financed and have investment made in it. The Minister will guess from the anger shown today that there is a seething resentment in the country and in the Labour party, which I am
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delighted the Liberal party share, against what is being done to councils and council tenants. We need a more intelligent regime. It is time for a change; why do the Government not get on with it?
10.24 am
Mr. David Crausby (Bolton, North-East) (Lab):I was first elected a councillor in May 1979, on the same day, incidentally, that Margaret Thatcher became Prime Minister. Her achievement was greater than mine, but she is now consigned to the dustbin of history and I am still in Parliament.
I was surrounded by councillors from all sides of the political divide, who were absolutely committed to the provision of good quality housing accommodation. They were right to be immensely proud of the work that they had done in helping their constituents out of the slums and into decent accommodation. I became a member of the housing committee and we spent much of our time in those early days condemning and clearing terraced properties that were unfit for habitation and replacing them with homes fit for the bringing up of children.
I did not know it at the time, but Margaret Thatcher and 18 years of Conservative Government were about to change matters—and change them very much for the worse. It was thought there was something unsavoury about council houses, and it became fashionable to sell them as quickly as possible and not build any more. I am sad to say that the fashion has not changed very much. The proud record of councils throughout the country that had changed the living conditions of millions of people was rubbished overnight. As Labour people, we were completely committed to council housing in those days and, when I stood for Parliament for the first time in 1987, I campaigned on my council estates on the basis that a vote for a Conservative Government would be a vote to privatise and sell the council houses. What I did not realise at the time was that a future Labour Government would contemplate the same action, albeit in a more sophisticated and devious way.
I believed—and I still believe—that the provision of council housing was one of the concrete foundations on which councils stood, and if they are now to be considered unfit to provide housing, we must ask ourselves what they are fit for. Local authorities have, of course, made mistakes over the years and there has been far too much bureaucracy and too little tenant involvement. They certainly have lessons to learn and there is real room for improvement. However, a democratically elected council is surely the right and proper institution to deliver decent living standards. If we ask tenants to vote for the matter without prejudice in an open and fair ballot, they will vote overwhelmingly for the council to retain the ownership and management of their housing stock, but that cannot happen because that option is not on the ballot paper.
If the Office of the Deputy Prime Minister doubts my argument, we should set out the options, put them to the vote and find out. That is the way in which I was brought up in this great democratic country. If the only choice is death by drowning or death by starvation, we can perhaps understand why council tenants become a little disillusioned with the so-called democratic process.
In any event, the transfer of housing stock is an expensive process—and for what? We will still be left with tenants having only one supplier. Will the Minister
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explain why one privatised supplier is more efficient and effective than a public supplier? The Government have tried to justify transfers by arguing that they increase tenant satisfaction and provide a greater choice of landlords for tenants. Well, they should do—should they not?—considering all the money that they receive after transfer. Indeed, tenants should be considerably more satisfied with matters, but the reality is that they are not. They are not any more satisfied than if the available capital had been provided before transfer.
As my hon. Friend the Member for Bolton, South-East (Dr. Iddon) mentioned, the arm's length management organisation option has no legal requirement for the council to test tenant opinion with a vote. Many tenants' organisations have supported ALMOs as an alternative to privatisation. If the Government should renege on that by changing the rules to allow ALMOs to have complete ownership of council houses, it would be nothing short of a disgraceful betrayal. Those who have argued that the introduction of ALMOs was just a first stage in separating the stock from the council would be proven right.
Let us have no more of this nonsense, and let the tenants decide. They will put council housing where it belongs: in the hands of the locally elected council. The very least that they should expect is that the option should be theirs.
10.31 am
Mr. David Drew (Stroud) (Lab/Co-op): I take careful note of your encouragement to be brief, Mr. Gale; I shall be, because I will just make one simple point.
No one has said this, but to be fair to the Government we should congratulate them on the decent homes standard. I shall give the Minister some opportunity to feel that he has a friend in the Chamber. The trouble is that the Government have gone about achieving it in entirely the wrong way.
I shall make a narrow point about the options appraisal process, which in itself has nothing wrong with it because we should examine the condition of our council estates. Those of us who support the fourth option do so because we know that it is what our tenants really want. The saddest thing is when the tenants go through the appraisal process. My tenants decided not to go for stock transfer and that led to a number of interesting repercussions. Tenants should have the knowledge, when they choose their independent tenants advisers, that they are exactly that: that they are independent and that they advise tenants. My contention is that they are anything but. They are part and parcel of the entire wretched process.
Stroud is currently going through the options appraisal again and our current advisers are much better. I want the Government to go back and, if nothing else as a result of this debate, ensure that independent tenants advisers are independent and do give advice. They should not be part and parcel of the process of ensuring that the wretched consultants' reports, which we have all had done, are to be pursued in every letter of the law. I hope that the Minister will accept my friendly advice about what is rotten at the centre of the process. If it were an objective process, tenants would decide who is to advise them. Those of us who have been through this process know that that has not been happening. We need to put that right.
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Mr. Roger Gale (in the Chair): I call David Taylor.
10.33 am
David Taylor (North-West Leicestershire) (Lab/Co-op): Like scores of Members on the Labour Back Benches, I grew up in a council house.
Mr. Dennis Skinner (Bolsover) (Lab): You are doing this on purpose, aren't you?
Mr. Roger Gale (in the Chair): Order.
Mr. Skinner : You are thinking of that row.
Mr. Roger Gale (in the Chair): Order.
Mr. Skinner : You are using your authority to stop me speaking.
Mr. Roger Gale (in the Chair): Order. I am not using my authority to stop anybody speaking.
Mr. Skinner : I have been here since 9.20 am. It is all because of that row that we had last year.
Mr. Roger Gale (in the Chair): Order. I will have to ask the hon. Gentleman to leave in a minute.
Three Members who have been rising have not been called. I have endeavoured to call, and have succeeded in calling, everyone who wrote to Mr. Speaker.
Mr. Skinner : A lot of my hon. Friends know why you have done it.
David Taylor : The private housing market into which our Government seem determined to decant residual council tenants is not generally concerned with providing affordable housing for young families or anyone else. It is critical that our Government—a Labour Government—pull back from the alarming precipice over which we are teetering and below which lies a full blown housing crisis.
I urge the Minister, whom I respect—he has had early successes in his role and has tackled the high hedges crisis on the middle-class estates—to tackle the landlord crisis on council estates. He could stop all housing transfers in progress and abandon future ballots of council tenants, who will be asked to choose between three forms of privatisation, none of which they have asked for.
Tenants in North West Leicestershire district council, the only Labour council in Leicestershire, and one with a good track record as a landlord—accountable, visible, affordable and with a reasonable repairs record—are being coerced down the stock transfer route. My hon. Friend the Member for Bolton, South-East (Dr. Iddon) referred to one or two of the undemocratic processes surrounding the balloting process. He did not get the chance to mention the one-sided material, the tearing down of posters that opposed the privatisation process
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and the refusal of local authorities and others to book halls for meetings that were to outline to tenants the real implications of what they were about to be asked to do.
It is clear that our Government have had a reasonable track record on affordable housing. However, we shall not meet the laudable decent homes target unless there is a change of policy. The Labour manifesto finished up on the front doorsteps of candidates about 36 hours before polling day. However, I welcome this commitment:
"By 2010 we will ensure that all social tenants benefit from a decent, warm home with modern facilities."
That was a clear and unequivocal commitment, and it does not say, as Ministers have previously said, that improvements are dependent on tenants voting the right way.
Lynne Jones (Birmingham, Selly Oak) (Lab): The only way that the Government have any chance of meeting the decent homes standard without more resources is by demolishing a great deal of houses that are not decent. We now have a crisis, not only because of the condition of homes, but because of homelessness: hundreds of families are now in temporary accommodation.
David Taylor : Last week's report by the House of Commons council housing group was an important document and I am sure that the Minister will return to his eerie on the 14th floor of some Government office block to read it as a matter of urgency, if he has not already done so. The key principles that our group urged on the Government were that there should be a level playing field of finance for council housing, a fair and balanced debate and acceptable safeguards and guarantees for the tenants affected.
There is no sign in our Government's social housing record so far that those principles have underpinned what they are planning to do. As my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) said, my right hon. Friend the Prime Minister said that he wants to listen to people's voices; it is not too late to listen to those voices. In an hour and a half's time, at Prime Minister's questions, I shall ask my right hon. Friend to do just that in relation to option four. I hope that we find that the Minister has listened to us this morning.
10.38 am
Sarah Teather (Brent, East) (LD): I shall keep my remarks brief to ensure that the Minister has the maximum time to respond to the debate. First, I congratulate the hon. Member for Wolverhampton, North-East (Mr. Purchase) on securing this vital debate. The fact that the Chamber is so full and that Members have spoken with so much passion should give the Minister great cause for thought and make him realise the importance and value that is attached to council housing.
The Government are in a right old mess. They have made a pledge that all homes will be brought up to the decent homes standard by 2010. We know that that will cost billions. To deliver it, the Government thought that
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the best way would be to stock transfer everything that they had to registered social landlords to ensure that the cost of providing those improvements was taken off the Government's balance sheet. To do that, they forced councils to ballot tenants, and because they believe in choice, they gave councils a limited number of choices, as long as they chose exactly what the Government wanted them to do. As all hon. Members have said, those choices involved many bribes and incentives and some dubious electoral means.
It is not surprising that councils found themselves having to encourage tenants to accept the options provided. We can imagine what happens when beleaguered councils that have huge bills for housing repairs, and are constantly and quite rightly being complained at by tenants, are given the choice of making a transfer to somebody else who will provide those repairs or being left unable to promise any improvements. The choice is: "Stay with us and we can do nothing about the state of your home, or take one of the Government-prescribed options and things may improve."
In spite of that, tenants throughout the country have expressed their democratic right and have rejected the options that the Government have provided. So, what will the Minister do? He pledged that the Government will meet the decent homes standard, but the Chancellor has refused to extend borrowing rights to councils in order to borrow through housing finance. Many homes need an enormous amount of money spent to improve things. How will the Government meet the pledge? They cannot.
Endless reports have said that there are much more sensible ways to deal with the issue, through the fourth option. The Audit Commission has said that housing finance needs to be modified. We know that it is cheaper for local governments to borrow than RSLs. The Local Government Association supports the need for a fourth option. Even the Deputy Prime Minister has said that the current situation is unsustainable. So, why will the Government not move on this issue?
The truth, as other hon. Members have said, is that the Government do not trust local government. They do not even trust their own Labour councils to deliver services. That is the problem with this Labour Government. We have had capping, passporting, ring-fencing and now stock transfer. What is there left for local government to do? Why do the Government not just go the whole hog and abolish local government and let central Government interact with a private companies? I will tell the Minister why: if he did that, there would be nobody to blame.
10.42 am
Mr. Robert Syms (Poole) (Con): I congratulate the hon. Member for Wolverhampton, North-East (Mr. Purchase) on securing the debate. The documents that have been produced—the fourth option report and the Audit Commission document—provide a good base for a genuine debate about an important subject. I hope that the usual channels take into account the remarks made earlier by the hon. Member for Bolton, South-East (Dr. Iddon). The Government should consider a debate on this subject on the Floor of the House, with sufficient time for Members to express their concerns.
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Over the last century, the expansion of council housing has made a major difference to the material situation of many millions of people. Slum clearance programmes and, in many areas, the replacement of slums with council housing has certainly improved the general health and well-being of many of our citizens. There is much to celebrate about what Governments of all colours did throughout the last century.
I do not disagree with much of what the Government are doing. Most of the attacks have been because people think that the Government are being too right wing on this issue. Clearly, if 12 per cent. of all households in England still live in council housing, for the Government to meet their decent homes target by 2010, this area must be addressed.
If one is asking people to make a choice, however, it is responsible to give them a real choice. If a housing authority is good and the tenants do not wish to transfer or go for an arm's length management organisation, I see no real reason why they should not remain and why there should not be a fourth option. Not many members of the Conservative party put that idea forward, but my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) has made that point forcefully on occasions.
One of the benefits of having a fourth, fifth or sixth option is that it allows us to contrast the various ways in which an important service is delivered. If we read the document produced by the council housing group, we can see that contrasting and comparing housing associations with other social options helps to inform the debate.
It is important that the issue be addressed. Given that there has been major change in the social housing sector, there should be a review of how it is financed. We should not lose sight of the fact that the Government have an ambitious target for decent home standards. If we argue about who runs what and who does what, we lose sight of the fact that decent housing standards for many of our constituents is an objective worth working towards. Therefore, the fourth option should be considered.
Earlier, we heard the hon. Member for Colchester (Bob Russell) talk about respective records and house building. The Government said that the reason why they have not built much council housing is backlog, estimated at £19 billion in 2000. So there is a real task in respect of housing. We all know that in many local authorities there are too many voids. It is not necessarily a matter of building lots more houses; we should use and repair existing housing stock so that we can reduce waiting lists. According to the most recent figures that I saw, about 380,000 people are waiting for affordable housing, and about 61,000 throughout the country are in temporary accommodation. One consequence of the housing boom of the past several years is that many families have real difficulty in accessing affordable housing.
I hope that this important subject will be debated more fully. I am concerned about the allegations made about how even-handed or otherwise the Office of the Deputy Prime Minister's task force is, and about the accusations in respect of how some ballots are undertaken. I do not like it when ballot dates are changed. We are all democrats, and we all have concerns about how rules are observed. I hope that the Minister will take on board some of the genuine concerns about
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the process. Whatever a political district or borough agrees on, if there is concern about a process, it will, in the long term, lead to much hassle, argument and concern. I hope that the Minister will consider the matter. Perhaps the Electoral Commission might be a legitimate group to lay down a few more rules about the most legitimate way for the ballot to go ahead, so that people think that it is free and fair.
To give the Minister time to answer the strong points that have been made by hon. Members this morning, I shall bring my remarks to an end.
10.48 am
The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Jim Fitzpatrick) : I begin by congratulating my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) on securing this important debate on council housing and the fourth option. I congratulate him also on the eloquent and passionate way in which he introduced it. That tone has been carried all the way through it.
I assure hon. Members on both sides of the Chamber—they may represent different parties, but they are clearly on one side of the arguments—that I acknowledge the strength of feeling demonstrated both in this morning's contributions and in the number of Members present. In response to several requests, I will ensure that that feeling is communicated to my right hon. Friend the Deputy Prime Minister and to my colleagues at the Office of the Deputy Prime Minister.
Members will not be surprised to hear that my text, which was prepared beforehand and which responds to many of the points raised, does not announce any change of policy. However, I will put on record the Government's responses to some of the comments made.
First, I shall answer one or two questions asked by colleagues at the beginning of the debate. My hon. Friend asked about the disrepair in the private rented sector as a separate issue. We have set a target to increase the proportion of vulnerable householders living in decent homes in the private sector, and that percentage has increased from 57 per cent. in 2001 to 63 per cent. in 2003. The Housing Act 2004 included a number of measures to improve the condition of private rented homes. I shall give my hon. Friend details on that later.
My hon. Friend the Member for Bolton, South-East (Dr. Iddon) asked about the arm's length management organisation review group. I advise him that the proposed consultation paper on the long-term role of ALMOs will be published later in the summer. I do not have a definitive date, but that will be coming forward in due course.
Mr. Skinner : I thank my hon. Friend for allowing me to speak in this debate, because it is pretty clear that Gale has no intention of calling me. This is the second time in this Chamber that he has done the same thing.
My question, among many that I would have raised in my contribution, is that if local authority housing is taken away from the small district councils, like Bolsover district and north-east district councils in Derbyshire, which I represent, those authorities, which
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do not have transport, social services or education responsibilities, will have very little left to do. Bear that in mind.
Carry the message back to my right hon. Friend the Deputy Prime Minister and tell him, above all, that what is happening here now—the campaign that started on a small basis a few years ago—is something that is growing every month, and that the Government should change their policy.
Jim Fitzpatrick : My hon. Friend has made his point and I am sure that it will reach my right hon. Friend the Deputy Prime Minister.
We have, as colleagues know, more than 4 million social homes that are worth around £400 billion, but decades of neglect and underinvestment meant that, as has been said this morning, in 1997 our assessment was that more than 2 million of those homes did not meet basic standards of decency. It was calculated that there was a staggering £19 billion backlog of repairs. To remedy that, the Government undertook a major review of the finance regime and took a number of steps to direct resources where we believed they were most needed. We also massively increased those resources. Past changes to funding systems are of little comfort to tenants in non-decent social housing. We remain committed to ensuring that all social tenants live in decent homes. With work already completed and plans in place, we are already 86 per cent. of the way towards meeting our target.
As hon. Members have said, where a local authority requires additional resources to deliver decent homes, there are three options: arm's length management organisations, transfer and PFI. In my constituency which covers the boroughs of Tower Hamlets and Newham, we have PFIs, transfers and an ALMO.
Mr. David Anderson (Blaydon) (Lab): Will my hon. Friend give way?
Jim Fitzpatrick : If I have time at the end, I will return to my hon. Friend.
The House of Commons council housing group insists that the options are all about privatisation, and it will not be surprised to hear that we do not accept that definition. Councils that opt for PFI and ALMO still retain ownership of their stock and the transfer of the stock goes to a housing association—a not-for-profit organisation—that puts surpluses back into social housing.
Since 1997, 108 local authorities have transferred homes, making available £6.5 billion in direct capital investment to improve stock. Some 10 PFI schemes are fully signed off, with a further 14 in procurement. Both transfer and PFI schemes are enabling major regeneration of neighbourhoods far beyond the boundaries of just decent homes.
Determining the best option for the future of a council's housing stock is identified through the options appraisal process, as has already been mentioned. The majority of local authorities that were required to
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undertake an option appraisal have achieved sign-off or have submitted their appraisal for sign off. Our deadline for the completion of that process remains the end of July and no extensions have been granted.
The Government have always placed great emphasis on tenants being at the heart of the decent homes programme, which cannot be delivered without them. We recognise that it is fundamental to tenants' rights that they can access impartial information without bias towards one option or another, which is why we encourage councils to use an independent tenant adviser to ensure that tenants have a clear picture of the process and what each option could deliver. Without clear evidence of tenant involvement, an option appraisal will not achieve sign-off from the Government office.
Joan Walley : Will my hon. Friend give way?
Jim Fitzpatrick : I will come back to colleagues if I can get through the majority of my text.
Tenant engagement does not stop once a decision has been made. In fact, tenants comprise about one third of the governing boards of transfer housing associations and ALMOs, broadening tenant participation to an estate and neighbourhood level. Tenants are also central to the PFI process and are consulted through the lifetime of the contract, having input into the choice of contracts or being asked what works they would like to see carried out and to what standard.
Increasingly, we are seeing the development of a number of innovative, community-led stock transfers that would not have been possible without the options appraisal process giving tenants a voice and an opportunity.
Tenants want to be involved and are involved. Since 1997, there have been 161 positive transfer ballots, with an average turnout of 72 per cent. and an average vote in favour of 73 per cent. ALMO ballots have had an average vote in favour of 84 per cent. Tenant participation has led to tenant satisfaction. Analysis done by HouseMark showed that the overall ALMO tenant satisfaction rate remains high—at 75 per cent.—while Kirklees ALMO reports that, under the ALMO's management, tenant satisfaction has increased steadily and is now 93 per cent.
As for RSLs, beyond a new name and culture, tenants enjoy better services and have greater satisfaction with their transfer landlord. The feedback database of tenant opinion showed for 2004 that 84 per cent. of transfer tenants surveyed were satisfied with their landlord, 88 per cent. were satisfied with their accommodation and 84 per cent. thought that their rent was good value for money.
That brings us to the fourth option. It is one that would allow local authorities who manage their own stock access to direct additional investment. As I know, the position of the all-party group that deals with council housing is that councils could meet the target through retention if we let them retain surplus rental income and capital receipts. However, the surpluses made by some local authorities are used to offset deficits in others. Surpluses rarely, if ever, occur where the need to spend is greatest. Allowing the authorities that make surpluses to retain those surpluses would, because total
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funding levels have been agreed, mean reduced subsidies—and, therefore, higher rents—for authorities with a deficit.
The pooling rates for capital receipts strike a sensible balance between local and national needs. We are under an obligation to ensure that, where we provide extra resources, we also drive up performance, allow tenants to have a say on how the extra resources should be spent and secure value for money.
Bob Russell : Will the Minister give way?
Mr. Roger Gale (in the Chair): Order. The Minister has made it plain that he is not going to give way.
Jim Fitzpatrick : We believe that our decent homes programme is the best way forward. It provides three innovative and flexible ways to support local authorities that need additional funding to ensure that their stock meets the decent homes standard.
Mr. David Anderson : It seems to me that the debate is more about democracy than about housing. What message should I take back to the 400 members of the GMB, Unison and Amicus who work for the repairs and maintenance department of Gateshead borough council? On Monday morning, they were told that their jobs will be privatised or they will have to go on the dole. They have no choice. Also, what message do I give to the councillors in Gateshead who were told that they have no vote on the matter?
Jim Fitzpatrick : I cannot say what the message should be because I am not familiar with what is happening in Gateshead and with the details of negotiations between trade unions and the local authority. I will look into the
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matter and write to my hon. Friend to let him know what my opinion is after I have had a chance to study the situation.
Joan Walley : I would like to know whether there is anything in the Minister's text about the fourth option of the level playing field. All we want to see is a fourth option with a level playing field. If the Minister has come prepared for the debate this morning with a text about that option, can he give any comfort to those people who spoke so passionately about how the option could be considered through proper channels?
Jim Fitzpatrick : I thank my hon. Friend for her comment. It takes me back to the point that I made at the start of my comments. I am not in a position to change policy this morning. Nobody would expect that. I have said that I will report the strength of feeling from the debate. I do not say that it will change the mind of my right hon. Friend the Deputy Prime Minister's mind or Government policy, but I will communicate it. I assure her of that. If my text is not satisfactory for colleagues, I apologise, but I must get on record some of the points that the Government want to make in response to comments that were raised.
In conclusion, the timing of the debate could not be better, given the announcement last week made by my hon. Friend the Minister for Housing and Planning of a further 61 transfer PFI and ALMO schemes that will invest more than £3 billion to tackle another 125,000 non-decent homes and to create 1,400 socially rented homes. Since 1997, total housing capital investment has tripled. In 2007–08, £2 billion will be spent on social housing. That is double the level of 1997. As part of the Office of the Deputy Prime Minister's five-year plan, there is a £38 billion investment in sustainable communities. Our policies are bringing in hugely increased housing investment and vastly reducing the number of households living in non-decent homes. They are supported by many local authorities and valued by tenants.
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