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If we are to increase effectively the supply of affordable housing, it will involve a partnership between the Government, housing associations, social landlords, developers and, obviously, local government. I wish to say one or two words about the situation in Birmingham. There is no doubt, as the hon. Member for Ludlow (Mr. Dunne) said, that overall housing investment in the west midlands needs to go up, and go up radically. But I have some concerns about the policies being pursued by the current administration on Birmingham city council. That is not to say that the previous administration, which was Labour, got everything right. It did not and other hon. Members and I had criticisms of it. Some of those points were brought out in a seminal report by Anne Power, who chaired an independent commission on council housing in Birmingham. Had the Labour administration remained in power, some important progress would have arisen from that report,
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but sadly the present administration has decided not to take up its recommendations.

The Conservative and Liberal Democrat coalition that now runs Birmingham does not get everything wrong, however. It does some things right, but I have major concerns in two areas and I would appreciate my hon. Friend the Minister’s comments on them when she replies to the debate. The first is the approach to meeting the decent homes strategy for the city. The way in which the council is approaching that might not be sustainable and could have a detrimental impact on the supply of affordable homes in the city. The second is the council’s whole approach to tackling homelessness.

The council has based its decent homes strategy on what it calls positive retention, which appears to be financed by a rush of land sales. I hope that I am proved wrong, but it is not clear to me that the figures add up in a way that would make the programme sustainable in the medium term. That is why it was wise of my hon. Friend the Minister to advise the council, in her letter of 20 October, that she is asking officials closely to monitor the programme to ensure that it is on target and continues to be financially viable. There are some concerns that it might not be so.

The problems extend beyond whether the figures add up. There is also a real concern that the Conservative-Liberal Democrat administration’s desire to raise as much money as possible from land sales could be pushing up land prices in a way that is not necessarily helpful in promoting house building in the social rented sector and the social housing sector generally that the Committee’s report recommends and Birmingham certainly needs. Another unwelcome consequence of the administration’s approach is that it is centrally driven and could end up inhibiting the development of the effective community engagement and locally based housing initiatives that are so important to building mixed, sustainable and safe communities. The independent housing commission that I mentioned emphasised that approach as very important.

We have been pioneering that approach in my constituency of Northfield on a cross-party basis and I hope that the city council does not try to stifle what is being done or subsume it into models imposed from above. I have some concerns about that because I know that my hon. Friend the Member for Birmingham, Hall Green (Steve McCabe)—who, as a Whip, cannot speak for himself—has real worries about the way in which the city council has terminated a management agreement for the largest tenant-managed co-operative in the country in his constituency. I do not dispute that there are serious allegations against that management co-operative, but my hon. Friend the Member for Birmingham, Hall Green maintains that the city has gone about trying to tackle the problem in an unacceptably heavy-handed way. Moreover, its procedural approach appeared questionable and in some cases to be contrary to the rules of natural justice—to the extent that my hon. Friend has had to refer the matter to the ombudsman and the district auditor. Once again, I hope that my hon. Friend the Minister will look at the matter in the coming period.

Last year, I was fortunate enough to secure an Adjournment debate in Westminster Hall on Birmingham’s management of its homelessness service. Local authorities such as Birmingham have Government targets to reduce the number of families
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presenting as homeless, but the problem that I identified in that debate was that Birmingham seemed more concerned about meeting the letter of the target than its purpose. In other words, a big part of the city’s strategy appeared to be based more on reducing the number of families recorded as presenting as homeless or threatened with homelessness than on identifying the number who are in fact homeless or threatened with homelessness and helping to overcome that as well as possible.

That approach led the council to adopt a series of what I can describe only as “gatekeeping” measures that made it more difficult for families threatened with homelessness to be so recorded in its figures. In the Westminster Hall debate, I drew attention to the most ludicrous aspect of the matter: even when landlords were acting lawfully in giving tenants notice to quit and the tenants involved felt that that was reasonable, the council was forcing them into unnecessary disputes and costly court actions. I pointed out that, in adopting that strategy, the council was not tackling the problem of homelessness.

I accept that some improvements have been made since then, and that useful work has been done on an advice and referral service called Home Options that is being adopted by the council and some of its partners. The council recently nominated itself for a Chartered Institute of Housing award. It did not win—despite what its press release said—but it did reach the final shortlist.

However, problems remain: as far as I can tell, for instance, Birmingham city council is still forcing landlords and tenants into the unnecessary and costly court procedures that I described earlier.

There are other, more fundamental, problems. Birmingham city council still seems to think that reducing the number of families whom it allows to register as homeless or threatened with homelessness is the same as reducing the numbers who are in fact homeless or threatened with homelessness.

Another difficulty has to do with schemes such as Home Options. Such schemes have some good points, as I said earlier, but problems arise with the highly misleading statistics that the council gives for the number of cases in which it considers a scheme has prevented a family from becoming homeless. All too often, they deal with cases that are referred by housing department staff to some other agency, either internal or external. Any such case that is not sent back to the housing department is recorded as one in which homelessness has been prevented.

A statistic derived in that way might mean that a case of homelessness has been prevented, but it might not—the result might simply be that an applicant has joined the ranks of the hidden homeless. Housing organisations such as Shelter are aware that the hidden homeless exist, and all hon. Members know the same from their casework, but all too often those people do not show up in the statistics.

My right hon. Friend the Member for Oxford, East (Mr. Smith) and my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) have also spoken of the hidden homeless. I stress that I am
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not talking about cardboard city: I am talking about young people sleeping on friends’ floors, and about families who are forced into already overcrowded accommodation with relatives, with all the stresses, strains and family breakdowns that that involves. Such cases might not show up in the statistics, but that does not alter the fact that they are real.

Birmingham city council has just published a scrutiny report on its homelessness service, and I commend it for that. The report makes some useful points, although I hope that the council will publish the evidence on which it is based. It says that the council wants to review the situation in the coming year. I hope that the review will ask some searching questions about exactly what the statistics the council uses are based on. I ask my hon. Friend the Minister to keep a close eye on Birmingham and this issue to see whether, in reality, the claims that the council makes for itself reflect the whole picture.

I also ask my hon. Friend at least to consider changing the target that applies to councils to one that obliges them to focus their efforts on preventing homelessness and tackling it where it is unpreventable—rather than one that relies on recorded homelessness presentations, which can lead to overly restrictive definitions of what that means by particular councils and to overly restrictive definitions of what constitutes temporary accommodation. I know that organisations such as Shelter are worried about that. It is not a problem that applies only to Birmingham, but it is an issue that we need to address.

I say those things because I think that they are necessary, but, of course, they are entirely without prejudice to my plea for more socially rented homes. However the homelessness service is managed, without the necessary supply of affordable homes, particularly in the social rented sector, we will not have the necessary properties. I hope that my hon. Friend will look closely at Birmingham. It is making some improvements, but I still have significant concerns—as do others—about the way in which the housing policy is being managed.

2.56 pm

Paul Holmes (Chesterfield) (LD): I, too, welcome the Select Committee report. As my hon. Friend the Member for Hazel Grove (Andrew Stunell) said in his opening comments, it is the latest in a long line of reports from all sorts of bodies that have highlighted the appalling problem in terms of affordable housing, both to buy and to rent. Like the right hon. Member for Oxford, East (Mr. Smith), earlier, I would like to focus on the part of the report that talked about the vital need for more social housing to rent to help to address those problems. That is one part of the problem. We have heard endlessly from Conservative Members about how we need to look to the private market to solve all the problems. However, social housing to rent is a crucial part of trying to deal with the difficulties.

The lack of social housing is down to a failure to build in recent years. Unbelievably, the present Government have a worse record than the Conservative Government in terms of building social housing. For every three properties that are sold under right to buy, only one is built to replace them. That leaves a big void in the market for the poorest families, who cannot afford expensive private rented accommodation or expensive mortgage prices.

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Dr. Brian Iddon (Bolton, South-East) (Lab): Will the hon. Gentleman admit that this Government have done far more than the Conservative Government to refurbish clapped-out stock?

Paul Holmes: The hon. Gentleman is quite correct: such money as has been spent has been focused primarily on improving old stock—sadly, almost entirely to the neglect of providing new stock.

As we heard from my hon. Friend the Member for Hazel Grove, in the last five or six years, council-house waiting lists have soared from 1 million to 1.5 million. That has a huge effect, both on the price of housing at all levels and in terms of the human cost on individuals. It puts pressure on the market price, both to rent and to buy. For example, when people look for private rented accommodation because there is no social rented accommodation, it pushes the private rents up to unaffordable levels, or allows exploitation by unscrupulous landlords. Equally, some people buy second, third or fourth properties to rent, as an investment. I seem to recall that the Prime Minister bought two or three flats in Bristol for precisely that purpose. That also drives up prices in the property market. The lack of social housing has a detrimental effect, both on private rent levels and on private house prices.

Dr. Roberta Blackman-Woods (City of Durham) (Lab): Will the hon. Gentleman accept that the problem of a lack of affordable housing is not necessarily a problem of this Government? The Liberal Democrat-controlled Durham city council in my constituency is delivering only a fraction of the social housing that it should be delivering, because it refuses to apply its local housing policy 12 to get a development contribution from the developers. It is simply not using the means that are available to deliver social housing.

Paul Holmes: I am not sure whether the hon. Lady was in her place earlier in the debate, but we had a number of exchanges on precisely that point—that councils have powers to require affordable housing. It can sometimes backfire when developers will not deal with those developments and properties because of those requirements.

Emily Thornberry: rose—

Dr. Blackman-Woods rose—

Paul Holmes: I am not giving way, as we have already had exchanges on the subject.

I disagree with the argument that the problem is not particularly associated with this Government. As I said in my opening comments, problems with social housing have—unbelievably—been worse under the Labour Government over the last 10 years than they were even under the Conservative Administration, who already had a pretty bad record.

I have highlighted problems with the level of private rents and the price of housing on the private market, but the human cost—for the 30 per cent. of the population who do not own their own homes and often have no hope of doing so—is so much more. My hon. Friend the Member for Southport (Dr. Pugh) mentioned constituency surgeries, and tomorrow I shall conduct
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my usual Friday surgery. Almost inevitably, I will hear the same stories every Friday from pensioners living in council flats or council family homes. They may have lived there for 30 or 40 years, seen their children grow up and leave, and they may have lost their partners. The house is too big, the garden cannot be maintained, yet they cannot move out. They would love to live in an old age pensioner’s bungalow, but the council is not allowed to build or provide them. The next person to come along to my surgery may have a young family and live in a council flat or private accommodation that is overcrowded with children. The family wants to but cannot move into a council house and certainly cannot afford to go to the private sector. As I say, the human cost is enormous.

I have repeatedly asked over the past five or six years: what is it about this Government, that they have such a dogmatic new Labour ideology that they oppose the principle of social housing in the form of council housing? First, in 1997, they effectively stopped council house building, and then tried to force every council in the country to privatise its council stock. More than 100 councils, including Chesterfield, have not done so, because their tenants chose democratically to stay with the council rather than privatise, but the Government are now vindictively penalising them for taking the “wrong” democratic choice.

I have raised that matter twice at Prime Minister’s questions, only to be told that I should celebrate choice. I do. If tenants choose to move away from the council because it is so badly run—I have certainly seen badly run councils—that is their choice. However, if tenants choose to stay with the council, as they did in Chesterfield and more than 100 other councils, their choice should be recognised and supported by a Government who claim that they support choice.

Both Conservative and Labour Members raised the question of where the money for more social housing comes from. Let me stay with the particular example of Chesterfield, one of the 70 per cent. of councils that retain stock and are judged by the Government to be in surplus financially in respect of council houses. That is strange in itself.

On the one hand, the Government and the Minister tell Chesterfield that it has too much money from its council rents, so some of it will be taken away to spend elsewhere. On the other hand, as we heard in respect of Birmingham earlier, the Government office for the east midlands comes along with a jackboot every two or three months, complaining that there is not enough money to bring all an area’s houses up to the decent homes standard within the requisite time scale, so it has to privatise. Surely we cannot have both. Either there is too much money in the council house budget from rents, with the Government taking it away to spend elsewhere—including on Olympic infrastructure in London under the Office of the Deputy Prime Minister—or we do not have enough money and they want to force us to privatise. It cannot be both; that is totally impossible. It has to be one or the other.

David Howarth: There is also the example of Cambridge city council. Under my leadership in the early part of the decade, it went debt free, but it is still being penalised by the Government by what is called “negative subsidy”, so council tenants in Cambridge have to subsidise the rest of the country.

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Paul Holmes rose—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I remind the House that agreement has been achieved to divide our time between the various subjects of debate. To ensure that other subjects are adequately discussed, I appeal to hon. Members not to extend our current debate for too many more minutes, which would upset the balance of the day.

Paul Holmes: I accept your strictures, Mr. Deputy Speaker, and in view of the number of interventions that I have already taken, I shall certainly not take any more.

Let me conclude as quickly as possible. Chesterfield council was told that it had too much money in council house rents, so in the last financial year £3.2 million—14 per cent. of all the rents paid by Chesterfield’s tenants—has been taken away to spend somewhere else in the country where it is desperately needed. Yet if the council privatised tomorrow, the privatised landlord could keep the money. How can it be that today the money must be redistributed elsewhere in the country, but tomorrow, under a private landlord, we could keep the lot? Chesterfield council was told that 70 per cent. of its right-to-buy receipts must be taken from it by the Government to spend somewhere else, yet if it privatised the system tomorrow it could keep all the money. How can it be that today a total of £9.2 million must be taken from Chesterfield to be spent elsewhere, including—insultingly—on the Olympic infrastructure in London two years ago under the former ODPM, yet tomorrow it could stay in Chesterfield, with a private landlord? The situation is ridiculous.

Why is the policy so incomprehensible and vindictive? First, there is the new Labour dogma that the public sector is bad and cannot deliver anything, as we see with Labour’s increasing attempts to privatise both education and the national health service. Secondly, the root cause is the Chancellor and the public sector borrowing requirement, which was confirmed by senior officials at a meeting of the Defend Council Housing group on 21 November, attended by several Labour MPs. Only yesterday, the Chancellor was boasting about how low our PSBR is. I do not understand that claim. If public borrowing builds hospitals, schools or council housing it is debt, and therefore bad, but if it is private borrowing it is economic growth, and therefore good. The money is the same, although it costs more to borrow privately than publicly—but private is good and public is bad. That is voodoo economics of the highest order.

Recently, localism has been a popular buzzword with both the Government and the Conservatives. If the word means anything, however, it must mean a shift in the balance—from London to the regions and local councils. The UK, and England in particular, is the most centralised democracy in the western world: 90 per cent. of the money raised by the Chancellor, in London, is handed out with strings attached. In Scandinavia, France, Germany or any state in the USA, people would react with blank incomprehension if we described our system. They run their local services, borrowing locally, prudentially, to raise money for them. They would not understand the idea that Oslo, Paris,
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Berlin or Washington should tell local communities how to run their health, police, fire, housing or education services.

In the last financial year, £9.2 million was taken from Chesterfield’s council tenants. The council could be building new houses with that money and refurbishing its stock. The council could be prudentially borrowing and using rents to meet the tremendous housing needs of Chesterfield. Under a local system, Birmingham, Southport, and all the other places we have heard about that are in the same position, could meet local needs. Will the Minister explain why a Labour Government continue vindictively to penalise and punish people in Chesterfield, which is primarily a poor working-class community?

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