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The Parliamentary Under-Secretary of State for Communities and Local Government (Angela E. Smith): I thank hon. Members for the tone and content of this debate. The Chamber is freezing cold today, so we might have expected a little heated debate, but the content and tone of the debate, and the recognition of the scale of the problem, have been welcome. I also thank hon. Members for allowing me adequate time to respond.
The main congratulations go to my hon. Friend the Member for Regent's Park and Kensington, North(Ms Buck) on securing the debate. There is a great consensus on the issue, but we would not enjoy that consensus were it not for my hon. Friends having raised the issues and the scale of the problems for her constituents. My hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry) has also brought the issues to the fore since she has been in the HouseI thought that her constituency was Islington, North, so my London geography needs some work. I shall try my best to respond to all the issues that have been raised in the time available.
I particularly welcome the fact that my hon. Friend the Member for Regent's Park and Kensington, North not only raised the scale of the problem in her constituency, but highlighted the complexity of the issue and how we got there in the first place. She recognised the complexities, contradictions and the difficulties faced in trying to address the problem, which are the kinds of issues that I should like to discuss.
Some background would be helpful. Between 60 and 70 per cent. of local authority leaseholders in London bought their flats under the right-to-buy scheme, but some early buyers have now moved on, and many people have bought ex-council flats on the open market. Right to buy has helped more than 1.7 million people to realise their aspirations to own their homes. It has brought home ownership within the reach of many who had perhaps not anticipated being able to buy their own home, but it has also led to significant problems. I welcome the tone of the comments that the hon. Member for Poole (Mr. Syms) made, but I was a bit disappointed that, although he welcomed the policy of right to buy, he said that there was a realisation later of the problems. It would have been helpful had some of those problems been recognised early on. We are talking about the cost to leaseholders today but, as many hon. Members will know, there have been other issues, such as antisocial behaviour. When such problems occur on a mixed tenure council estate, they are made all the more difficult to address because the estate is mixed tenure.
We must recognise that major refurbishments raise serious issues for local authority leaseholders, particularly older people and those on lower incomes. The problem largely affects people who live in flats in which major works are undertaken, which might involve replacing the roof or the windows of a block and, as we have heard, where the condition has deteriorated to such an extent that the work costs much more than it would have done some time ago. However, a balance must be struck between leaseholders interests and the benefits of those works to others, such as tenants and the local community generally.
Most leaseholders are required by the terms of their leases to pay annual service charges for general maintenance and major works charges towards the cost of works of repair or refurbishment of their blocks. It is the major works costs that people now find difficult to afford. The scale of that should be seen in context, however. A survey of 23 London boroughs showed that only 5 per cent. of the more than 100,000 local authority leaseholders there face bills of £10,000 or more, but large bills, which can come all at once, as my hon. Friend said, can exceed £50,000. Those can be extraordinarily daunting and frightening. Although the scale of the problem is not huge overall, it is concentrated in specific areas and there are pockets where it is most acute. [Interruption.] That was probably a leaseholder trying to gain entrance. The fact that fewer people are involved does not in any way diminish the scale of the problem or the worry felt by those affected.
I shall say something about the context. There is no dispute that right-to-buy leaseholders bought their flats at a significant discount, and at a valuation that reflected the condition of the property. Values have increased significantly. In 1980, the maximum discount was £25,000, a big proportion of the average market value in those days. That was raised to £35,000 in 1987; between 1989 and 1999, it went up to £50,000.
Recent open market sales show that flats in some of the blocks being refurbished are now worth more than £220,000. Major refurbishment may in some cases increase values further. Leaseholders, therefore, own valuable assets, but unless they are in a position to realise them, or they are assisted in doing so, they will have no help in paying their bills.
The major repair programmes now being undertaken by many local authorities are making good the£19 billion backlog of repairs faced by the Government in 1997. My hon. Friend the Member for Regents Park and Kensington, North outlined some of the excessive repairs that needed to be carried out in her constituency when she became its Member of Parliament. Her example of the Little Venice estate village displays that acutely.
Repairs undertaken now are made possible by additional resources and by the facility provided by the decent homes programme, which I am pleased to say has been welcomed by all hon. Members here today. As good landlords, local authorities must carry out works to all the flats in a block, whether they are tenanted or occupied by leaseholders. No one would dispute that that is necessary. We have made bringing council housing up to a decent standard a priority. When repairs are not done and properties deteriorate, prospects become worse for owners and tenants and costs become higher.
Ms Buck: The Ministers remarks have focused my mind on an issue that the Government could assist us with. Given the fact that most leaseholders have manageable bills of £10,000 or less, it is clear to my hon. Friend the Member for Islington, South and Finsbury and me that the problem is concentrated on estates and high-rise blocks. Targeted assistance is required for those households, whose bills are likely to be excessive and for which the decent homes initiative did not manage to catch the challenge. I am not asking the Minister to respond now, but I should be grateful if she went away and thought about how those leaseholders could be assisted and came back to us.
Angela E. Smith: I am taking away all the comments made by my hon. Friends the Members for Regents Park and Kensington, North and for Islington, South and Finsbury. They are particularly valid. Both my hon. Friends spoke helpfully and made suggestions about how the issues can be taken forward. My hon. Friend the Member for Regents Park and Kensington, North is right: the problems seem to be concentrated in some areas and are not spread equally throughout London.
There are some complaints that local authorities are going too far in their repairs. However, many local authorities believe, quite properly, that refurbishment should not simply meet the decent homes standard and that other works should be undertaken to ensure that properties are sustainable in the longer term and do not lead to larger bills in future. For example, the decent homes standard does not include things such as lifts, but lifts have to be maintained and sometimes replaced to meet the needs of residents.
Local authorities are also having to continue to carry out work in a relatively short time to address problems accumulated over decades. That is ultimately more cost-effective than doing the work piecemeal. However, it imposes pressures and in the short term, service charges for such major works will be higher. Although in the longer term, maintenance costs are likely to be lower, there is currently a problem of particularly high costs.
The repair programmes are necessary for all the reasons that I have outlined. However, we know, appreciate and understand the problems faced by some leaseholders in specific areas, such as those of my hon. Friends the Members for Regents Park and Kensington, North and for Islington, South and Finsbury.
As my hon. Friend the Member for Regent's Park and Kensington, North said, not all purchasers knew what they were taking on when they bought their properties. Information was available, but it was not always fully understood and appreciated at the time. Leaseholders who bought their homes under the right-to-buy scheme would have been given an estimate of the service charges likely to arise during the first five years, and the landlord would not have been allowed to charge them any more than that figure plus a reasonable allowance for inflation. Such are the requirements of the Housing Act 1985.
Having said that, I have to take on board my hon. Friends comments; if substantial work had been unreasonably deferred during that five-year periodas she suggested happened in the Little Venice estate villagethat might be challengeable at the leasehold valuation tribunal.
Since at least 1984, the Governments booklet for tenants, Your right to buy your home, has contained a section outlining the responsibility of leaseholders to pay service charges. However, I do not think that the scale of charges seen, for example, on the Warwick estate was predicted at the time. Advisers should have made leaseholders who had bought ex-council flats on the open market aware of their liability to pay service charges.
We have to recognise that not all local authorities would have been able to warn all prospective purchasers about some major refurbishments. For example, they would not have known about the Governments announcement of the decent homes programme and that that money would become available when it did.
My hon. Friend and other hon. Members have passed on to me what leaseholders have told them and suggestions on how the Government could proceed on this issue. Other leaseholders have written to my Department independently. I should like to outline some of the problems mentioned. As the hon. Member for Hazel Grove (Andrew Stunell) mentioned, leaseholders do not think it is fair that the mandatory £10,000 cap introduced by the Government in 1997 should apply to some works and not to others and want all bills capped at £10,000. One of the problems is that different charges reflect differences in direct grant funding and other funding mechanisms, but I shall take the issue back to my colleagues today.
Leaseholders have also said that unnecessary work is done and that work often costs more than seems necessary. They have complained that poor workmanship is not dealt with quickly to address any problems, that they are not consulted properly about works and that landlords do not take their views into account. They also say that local authorities do not take account of their individual circumstances.
In that context, we commissioned research into the scale and nature of the problem. We are publishing the results today. The research will inform our own review on the best way forward. My officials have consulted all the key stakeholders, including local authority landlord representatives from London and elsewhere, leaseholder representatives from London and elsewhere, the independent Leasehold Advisory Service, the Council of Mortgage Lenders, the Home Improvement Trust and the London Rebuilding Society. The latter two were set up to help home ownersparticularly older peopleto keep their homes in good condition.
My officials have also encouraged meetings between the London boroughs and the Council of Mortgage Lenders to discuss equity release options. It is clear from the consultations that the issues are complex and that there are no easy solutions. However, I assure hon. Members, and particularly my hon. Friend the Member for Regents Park and Kensington, North, that we recognise the problems and hope that the review can find a way to address some of them.
I want to say something about communication and support for leaseholders. Support and communication are available. There are well documented complaints procedures. Local authorities have told us that they monitor work undertaken, although I accept that that is not uniform throughout all local authority areas, and we want to ensure that more can be done on that issue. Help is available for leaseholders with large bills; some of it has been mentioned today. Leaseholders can get free advice on their rights from the Leasehold Advisory Service.
Angela E. Smith:
When reviewing something, it is unwise to say exactly how long the review will take. Today we publish the results of the survey that will inform the review. Given the scale of the problems, I assure the hon. Gentleman that there will be no unnecessary
delays. Like everybody in the House, the Government want to give certainty to leaseholders on the issue that we are discussing.
A number of measures are available under directions brought in by the Government in 1997, and our research shows that local authorities are making use of them. We recognise the balance that needs to be struck among different forms of tenure, the cost burdens to local authorities and the problems faced by leaseholders. I said to the hon. Gentleman that there would be no unnecessary delays; I would have thought that the review will take a matter of months. I thank my hon. Friend for raising the issue and assure her that suggestions made by her and other hon. Friends are being taken forward. The Government are listening
We are here today to seek justice for the national charity Community Service Volunteers and a local charity, Sandville self-help centre, both of which work in my constituency. We are here because Bridgend probation service neglected its responsibility to support, assist and engage with the third sector, which works with vulnerable people, and because it failed to check facts before taking unilateral action that damaged the good name of both charities.
When we introduce and debate new legislation in Westminster, we are mindful of the protection that we seek to provide for vulnerable people, but at the same time we are mindful of the need to ensure that the creativity, energy and spontaneity of the voluntary sector is encouraged, not lost or destroyed. Sadly, Bridgend probation service and the social services department have not been equally mindful of those responsibilities.
Sandville self-help centre is a place where people in distress, people who are terminally ill and people who face a life of pain can go to find companionship, compassion, acceptance and that rarest of all thingslove. Sandville is well known and held in high regard throughout south Wales. Its services attract people from across Wales and England.
Therefore, it was with some surprise in October last year that Gordon Jones, the head of services for older people in my local authority, informed me of concerns relating to the centre. He advised me that the probation service was concerned that prisoners were working at Sandville as part of a pre-release scheme operated by CSV, and the council was concerned that the centre did not do Criminal Records Bureau checks on volunteers or have policies and procedures for the protection of vulnerable adults and children. Mr. Jones advised me that the probation service and social services intended to hold a multi-agency meeting to share their concerns.
Knowing the unique nature of Sandville and its inherent goodness, I urged that its representatives and CSV were contacted to check what risk assessments were in place as part of the pre-release scheme, and that they be invited to attend the meeting. If that advice had been followed, perhaps the following catalogue of errors and the resulting disaster would have been averted.
Instead, the probation service and social services went ahead with their multi-agency meeting on11 November last year. Following the meeting, a letter was sent to Sandvilles service users advising them that, in the opinion of the multi-agency meeting, it was not safe for people to attend Sandville. I wrote to Tony Garthwaite, the director of social services, who confirmed that the probation service had not contacted CSV prior to the meeting but had stated that Sandville was not an appropriate placement for prisoners under licence. Mr. Garthwaite advised that the probation service intended to write to CSV regarding concerns about the category
of prisoner placed at Sandville. Notes of the multi-agency meeting show that the probation representative raised concerns about a high-risk tagged prisoner who had been placed at Sandville for two weeks. No such prisoner had ever been placed at Sandville; in fact, no tagged prisoners had ever been at Sandville.
In January 2006, as a result of letters and telephone conversations between myself and Mr. David Moor, the acting regional director of CSV, it was confirmed that the probation service still had not made contact. Mr. Moor advised me that CSV has offered serving prisoners the opportunity to volunteer in the community since 1971, and that the scheme has been funded by the Prison Service since 1984 and managed by the National Offender Management Service since April 2006. CSV was therefore operating a well-established, highly regarded and successful scheme.
Mr. Moor advised me that formal risk assessments are carried out, supervision is undertaken and support is provided for placements at Sandville. He informed me that there was no requirement to inform the local probation office when placements were made. That had been made clear to the Bridgend probation service at a meeting it had with CSV at Sandville in August 2005.
I cannot understand why a Member of Parliament can find the time to write letters, make telephone calls and check facts yet the statutory probation service cannot. It sent an officer to the multi-agency meeting who had no knowledge of Sandville or CSV. Bridgend probation service has a long-standing working relationship with Sandvillecommunity punishment offenders worked at the centrebut it was an officer with no knowledge who went to the meeting, not one with knowledge about the long-standing relationship.
At no time prior to the 11 November meeting did the probation service raise any concerns with Sandville about policies, procedures or police checks. It didnot write to CSV to follow up its concerns but in February 2006 suddenly ended community punishment placements at Sandville. The probation officer sent to Sandville to deliver the news was unable to explain to the charity why the decision had been made.
Angela Cossins, the director of operations at the Bridgend probation service office, claimed to have sent Sandville a letter explaining the decision at the end of Marcha month after the gentleman from the probation service had gone to Sandville to explain why the scheme was ending. The letter was not received by Sandville until I wrote to the probation service and asked why it had not been received.
Ms Cossins did not advise Sandville or CSV that in August she had written to all chief officers and regional managers of probation in England and Wales, expressly mentioning CSV and stating that Sandville was not a safe placement for pre-release offenders. In August, I again wrote to David Moor of CSV to ascertain whether contact had yet been made by the Bridgend probation service. As it had not, he sought a meeting with Tony Richards, the assistant chief officer of the South Wales probation service.
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