Examination of Witnesses (Questions 140-159)
RT HON
RUTH KELLY
MP, MR PETER
UNWIN AND
MR RICHARD
MCCARTHY
4 DECEMBER 2006
Q140 Anne Main: Are you confident
then that being voluntary is strong enough? Yes or no.
Ruth Kelly: If you would give
me one minute to answer this question, it is a combination of
a voluntary and a mandatory approach. We tackle this is in two
ways. We have building regulations which are mandatory, which
absolutely set the standard that every home must meet when it
is built. On top of that we have a code for sustainable homes
which sets out the future path that building regulations are likely
to take and can therefore change behaviour in the industry and
drive down costs. I shall be setting out more information on that
code in the speech that I make later in the year.
Q141 Martin Horwood: I interpret
that as saying no it is not going to be compulsory, which I think
is very disappointing. You talked about a trajectory. What sort
of timescale is this trajectory on then?
Ruth Kelly: We are currently going
through a process of considering the best way of implementing
the code. I shall set out the trajectory at that time, so I am
afraid the Committee will have to wait.
Q142 Chair: But when you set out
the trajectory, will there be timed milestones?
Ruth Kelly: Yes, we are going
to set out milestones and within that, we are also considering
whether assessment against the code ought to be mandatory. When
members of this Committee say that somehow the code ought to be
mandatory, what they are actually saying is that building regulations
need to be changed right across the country. I started off by
saying that building regulations have already made and are making
a huge contribution to this agenda in improving energy efficiency
40% since 2002. They will be making a much greater contribution
in future, but we have to do that in a way which maximises the
efficiency, which makes it as easy as possible for developers
to work with and which achieves our goals. Over the next few weeks
and months we are trying to strike the right balance here.
Q143 Anne Main: What is happening
to the older housing stock that we currently have? What are you
doing to try to upgrade that or give incentives through any system
to make people be able to afford to make them greener?
Ruth Kelly: You are right that
it is not just new buildings, it is also the existing building
stock and we currently have a review within the department of
our existing buildings. An interim report was published recently
looking at energy efficiency, such as cavity wall insulation.
If that were extended to existing homes, then we would save seven
million tonnes of carbon per annum. We are thinking about how
that could make more of a contribution. We are also looking at
water efficiency and whether that could make more of a contribution.
Q144 Anne Main: When you say you
are thinking about it, are the Government looking to help afford
it like the Conservatives did in the 1970s with loft and tank
lagging? It was a scheme in the 1970s.
Ruth Kelly: We are looking at
all of these issues in the context of the existing buildings review
which will report in March of next year.
Q145 Anne Main: Right, so you are
looking at giving funding towards it to encourage people?
Ruth Kelly: I am not commenting
on a specific example because it is right that we do this in a
proper and orderly way. Lots of people have made representations
about how we can improve energy and water efficiency and we shall
come out with our proposals in March.
Q146 Martin Horwood: You said that
you would like your department to be seen as green and you seemed
to be on the verge of saying that it was one of the departments
that had the greatest potential to contribute to climate change,
which I would agree with. One obvious way in which you could do
that would be finally to sign up to the climate change PSA which
other government departments have signed up to and which you signally
have not done. Amongst your PSAs you have not actually got one
that prioritises the environment as such.
Ruth Kelly: Well in fact we are
considering our approach to how climate change should be reflected
in a new PSA system which will be agreed as part of the Government's
comprehensive spending review and indeed, I shall shortly set
out a planning policy statement on climate change which will make
our commitment to this agenda absolutely clear to everyone.
Q147 Martin Horwood: So do you think
in the new round of PSAs, if that is what you are really talking
about, one of them will prioritise climate change?
Ruth Kelly: We shall clearly have
to come to an agreement as Government, not just as a department,
as to how best to build climate change into those PSAs, but our
contribution to that will have to be reflected.
Q148 Martin Horwood: How do you think
that will change your Government's policy, given that you do not
have one that prioritises climate change at the moment?
Ruth Kelly: I do not think that
people with a strong interest in the environment at the moment
think that we are being complacent on this agenda. They see a
real momentum within the department and desire to make a full
contribution to the climate change agenda. Just having a PSA will
not actually fundamentally change approaches.
Q149 Martin Horwood: Just give one
concrete example of how a policy might be changed or modified
as a result of adopting a climate change PSA. We have had the
suggestion of water efficiencies, the code for sustainable homes;
I might suggest going back to the house building programme. Any
concrete examples?
Ruth Kelly: We are making progress
on this without the PSA. Having a PSA might be a realistic reflection
of what we are doing. I gave a concrete example of the planning
policy statement on climate change which we shortly intend to
publish.
Q150 Emily Thornberry: I know that
a review is going on within the department at the moment on leaseholders
and charges to leaseholders on major works and after the Westminster
Hall debate Angela Smith said that the department was doing a
review; in fact I know that 150 of my constituents have fed into
that review with cases of their own about how major works charges
are affecting them. Ironically, within Islington, where there
are street properties which are being done up to decent homes
standards under the private finance initiative, that is capped
at £10,000 because of the piece of legislation which does
not include the social landlords' mandatory reduction of service
charges. That includes investment to do homes up to decent homes
standards under the private finance initiative and a number of
other different types of funding. Other funding streams though
are not capped and so I will have an old aged pensioner on a street
property who is expected to pay, let us say, £9,000 because
it is being capped and then someone else within some of my estates
who are being charged £32,000, £39,000, £42,000,
extraordinary amounts because their estate is being done up under
ALMO provision. That sort of basic unfairness is something which
I know the department is looking at. The question is: how is it
going?
Ruth Kelly: You point to a really
complex area of policy which you are absolutely right to say can
cause financial hardship for some. We are giving this a really
serious look. Part of the reason for this is the £19 billion
backlog of social housing repairs that we inherited as a Government
and our desire over time is to try to right that, to invest in
social housing stock. Of course, when people become leaseholders
they do accept that liability, but you are right to suggest that
it applies in different ways across the piece. Some things we
tell local authorities they have to do and some things are optional
for them to do. There is certainly wide-ranging scope for local
authorities to try to alleviate that financial hardship by providing
loans, for example, by offering people the ability to pay some
of this back when they sell.
Q151 Emily Thornberry: I know that
is the theory. The trouble is that when you have local authorities
who just will not exercise their discretion, it seems there is
nothing that can be done to force them to do it. The legislation
is there for them to exercise some discretion to alleviate hardship.
What if they just say "No, we're not going to" which
is what my council is doing?
Ruth Kelly: You raise precisely
the issue that we are looking at. I really do not want here to
raise people's hopes because this is a very complex issue. You
are right, in certain circumstances it applies in different ways.
What we cannot suddenly do is write off all of those loans, all
of those issues, on the basis of financial hardship. There are
people who have just bought their homes under the right-to-buy
legislation, or not even under that legislation, as leaseholders,
who find themselves in similar positions. What we do for one category
of person therefore has a read-across for others. These are issues
that we are looking at in that review. I hope that we shall at
least be able to encourage local authorities to look very seriously
at this issue where they are not doing that at the moment.
Q152 Chair: When is the review likely
to be completed?
Ruth Kelly: Shortly; we hope over
the next couple of months.
Q153 Mr Hands: Obviously my constituency
also has a very, very large number of homes being done up to meet
the decent homes standard, which is an obligation being put on
local authorities by central government. To take a case of somebody
like Mrs Greenaway on the Aintree Estate, and there are lots of
estates in my consistency which are exactly like this, she will
take you round her home and she will say "I have a very decent
home already". She does have a very, very decent home, but
still she is being hit with bills of £15,000 to £20,000
to do up the estate. I was wondering what your message to Mrs
Greenaway would be? Would it be to wait for the review or would
it be to offer some encouragement that perhaps her liability could
be capped out?
Ruth Kelly: I do not want to offer
any false hopes because I am not clear at this stage what we are
going to be able to say in the New Year when we reach the conclusions
of the review. I recognise this is a very serious issue that is
causing real financial hardship for some. I understand that many
local authorities are looking sympathetically at these cases and
offering help. We are trying to estimate the sorts of costs that
might be involved in different options, but I really do not want
to raise anyone's hopes on this because, as I said, it reads across
to all sorts of other areas of policy.
Q154 Mr Hands: But if the review
is reporting in a matter of a few weeks, you must surely have
some inkling of what might be in it?
Ruth Kelly: I did say in the next
couple of months. There is a lot of work to do over that time.
Local authorities at the moment have to provide loans for major
repairs in the 10 years after the purchase and up to £20,000
to help leaseholders who bought under the right-to-buy scheme.
In several other areas, they are able to offer financial help.
The point that has been made by my hon friend is that not all
local authorities take up that discretion, partly because it obviously
costs them in order to do so. We have to think about this in an
orderly way, not jump to conclusions. I certainly do not want
to raise people's hopes in advance of the conclusion of that review.
Q155 Mr Betts: When we had the Select
Committee report into decent homes we pushed ministers very hard
at the time about the deliverability of the 2010 target date.
Then the report showed that the target was 45 to 50% reduction
in the number of non-decent properties but you had only actually
hit 41%. Can you give us any reassurances that you actually are
going to hit the target in 2010?
Ruth Kelly: Shortly after I got
this job, I announced a slightly different approach to ALMOs and
the decent homes money, which was that we aimed to try to get
as many homes as possible up to decent homes thresholds by 2010,
but some local authorities have come to us and literally said
that they would be able to deliver much better value for money
by taking a little bit longer. Others have come to us and argued
in the context of creating sustainable communities that they wanted
to think about things that were not just to do with those decent
thresholds, but which also mattered enormously to the tenants
in terms of mixed communities. However, I can say to the Committee
that we still expect around 95% of stock to be decent by 2010
and the majority of all landlords are making their homes decent
in this timescale.
Q156 Mr Betts: So that is an explanation
for saying there might actually be a bit of benefit to the tenants
from a slight delay and an improvement in the programme. A letter
has been sent out fairly recently, has it not, to 32 ALMOs almost
saying "Will you volunteer to defer your programme beyond
2010, or at least some of the programme"? There is a clear
implication that if delaying work were an option for the time
being that could change. This is almost an implied threat to ALMOs
now that the Government have not got enough money, they are running
out and they need to extend the period over which it is spent.
Ruth Kelly: No, that is not right.
We have a huge challenge here. There is this £19 billion
backlog that we inherited in 1997 and we want to put that right.
Doing that across the country, virtually every single social home,
is a massive undertaking. Local authorities are at various stages
of the process, some have greater capacities to deliver than others,
some have more ambitious plans than others and some want slightly
different priorities within the process. As we go forward and
as we release funds for the new ALMO round, and we have just had
the sixth bidding round, we want to make absolutely sure that
we are getting value for money. You are absolutely right to say
that we are working with existing ALMOs, we are asking them what
they have committed to, what they have achieved, what their realistic
ambitions are, pressing them quite hard actually to say "Is
this value for money? Have you thought about all the factors that
are involved?" so that we get the best value for money but
we get what is right for the tenants and we are able to fund the
sixth bidding round. All of these are different issues that we
have to deal with.
Q157 Mr Betts: Are you saying then
to an ALMO, as in Sheffield's case, which has long-term contracts
planned with a number of partner contractors it is working with
and which has a timescale which it has given to tenants about
when their homes are going to be improved, that they will be under
no compulsion to row back from those arrangements, if they do
not want to?
Ruth Kelly: We have certainly
said that we shall stand by absolutely and honour funding which
has been committed. As we go forward we want to make sure that
these programmes are being delivered in the best possible way.
One of the factors of course that we are looking at and working
with individual local authorities on is what they have said to
tenants, to make sure that they are able to fulfil those commitments.
In each individual case local authorities have said very different
things. Some have had balance: some have not. Some have made specific
promises: others have not. All of those factors need to be taken
into account.
Q158 Mr Betts: So where there is
balance and tenants have been given dates and sometimes they are
not contracts in an absolute sense, they are contracts in terms
of arrangements and partnerships with contractors, the Government
are not going to put pressure on ALMOs who feel they can deliver
by 2010 within the money they have currently been allocated to
give some of that money back to Government and delay.
Ruth Kelly: That is exactly the
reason we are getting into such detail, working with individual
ALMOs, to find out what their capability is, what ambitions they
have, what their promises to tenants have been and to see that
they are being realistic about meeting that timetable. I am not
going to make a guarantee in any specific case, but money that
is already committed will be honoured.
Q159 Mr Betts: There is a bit of
suspicion around somehow that this was all a bit inevitable because
the Government had a decent homes policy of getting all houses
up to a standard by 2010, some of it is through RSLs, where private
money will be attracted in, some of it through ALMOs, which are
totally dependent under the current arrangements on public money
which counts against government borrowing. It then depended how
much government money you needed and on what tenants voted for.
If too many tenants voted for ALMOs, and a lot have, then the
Government money would not be around enough to get all the homes
under ALMOs up to a decent standard by 2010. Is that not actually
what has happened?
Ruth Kelly: Some local authorities
have come to us and said they need a bit longer than 2010. They
need an extra two or three years in order to deliver properly
on a cost-effective agenda. We are working with them to re-profile
the money that they receive so they can use it better. That will
mean that we expect around 95% of homes to be of the decent homes
standard by 2010 and we are working towards that target.
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