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6 May 2008 : Column 232WH—continued
Mr. Dhanda: I am about to discuss London and Quadrant’s role, its liabilities and responsibilities and why the Housing Corporation thinks that it is the right partner.
On 20 December 2007, at the request of lenders, Ujima issued a notice to the Housing Corporation under section 40 of the Housing Act 1996, and presented a winding-up petition to the court on the basis that it was unable to meet its debts. As the hon. Gentleman pointed out, that was in the run-up to new year’s eve. On 21 December 2007, four secured lenders served notices to the Housing Corporation and took action to appoint a receiver. Those actions triggered a 28-day moratorium under part one of the 1996 Act. It is fair to say that a 28-day moratorium over a holiday period can provoke a few issues as well. I believe that that is a matter that Simon Braid will consider in his inquiry into governance and how things can be done better.
During the moratorium, the Housing Corporation put a proposal to secured creditors under which London and Quadrant would receive a transfer of the assets and liabilities of Ujima, including all of Ujima’s housing stock. In preparing the proposal, the Housing Corporation considered all other potential options, including those from a number of other housing associations. It concluded that a transfer to London and Quadrant was the best possible option to deliver statutory obligations to tenants, creditors and taxpayers. The proposal was agreed by the secured creditors on 14 January 2008. The corporation appointed as manager Grant Thornton, which applied to the Financial Services Authority for a transfer of engagements; the transfer was registered by the FSA on 16 January. Plans to integrate Ujima into London and Quadrant’s operations have been implemented. The statutory appointees will remain in place on Ujima’s board until the accounts have been signed off and the association can be removed from the FSA’s register.
As the hon. Gentleman said, the Housing Corporation commissioned an independent inquiry, which will be led by Simon Braid of KPMG, to assess the handling of the Ujima case and whether any lessons can be learned in the context of the Housing and Regeneration Bill and the establishment of Oftenant and the new Homes and Communities Agency. The inquiry team has been interviewing key witnesses and has been commissioned by PricewaterhouseCoopers to carry out an information-gathering exercise and to consider some legal issues. As the hon. Gentleman said, the inquiry must not be a whitewash. I do not anticipate that it will be: I am sure that Simon Braid will be aware that this debate is taking place and will listen to the hon. Gentleman’s contributions attentively.
Mr. Wilson: May I place on the record my enormous concern about the number of witnesses who are not being interviewed but who have very important information to give to this so-called independent inquiry? A number have contacted me saying that they are very anxious to put their comments on the record. That is why some people in the sector think that the inquiry will be some form of whitewash.
Mr. Dhanda: It is useful that the hon. Gentleman has put that on the record and thrown down the gauntlet.
There will now be further rounds of interviews. PricewaterhouseCoopers is expected to submit its report to the inquiry team by the end of May, provided that it is able to schedule all its interviews promptly. I appreciate that many people will want to be interviewed, but we must let Simon Braid and his team continue with their work independently.
The inquiry team will aim to publish its full report in July 2008, so the hon. Gentleman will not have too long to wait. I know that there have been concerns that a black and minority ethnic housing association has been transferred to a mainstream housing association rather than to another BME association. Ujima’s board considered a proposal from a black-led association but did not think that it represented the best solution for the association and its tenants. Because of the scale of the financial problems faced by Ujima, only a solution involving a very large housing association with considerable financial capacity, such as London and Quadrant, was likely to be appropriate.
Having set out the history of the case, I will now draw out some issues and relate them to the powers in the Housing and Regeneration Bill, with which the hon. Gentleman must be familiar. I need to reassure hon. Members that the financial circumstances of Ujima are exceptional. As regards the overall financial position of housing associations, most appear to be well managed. Traditionally, the Housing Corporation has paid very strong attention to the viability of associations. That is borne out by the fact that the moratorium and winding-up process has only been used very rarely—twice in the past 10 years, as far as we are aware. No lender has lost money in lending to registered social landlords and no property has had to be sold because a lender enforced security. In other words, the system has been overwhelmingly successful in ensuring the viability of the sector. Lenders recognise that and their lending rates reflect the fact. At the same time, we must ensure that we learn lessons from the Ujima case and that we are not complacent.
It has been claimed that the corporation has seen viability as the overarching objective of regulation and has paid insufficient attention to quality of service to tenants. Without criticising the corporation, it is clear that many hon. Members have agreed with that view over the years. That is why I am pleased to see that the Housing and Regeneration Bill places tenants at its heart. Quality of service is a key objective, with tenants being involved through consultation in the setting of standards, and the regulator ensuring that tenants have information on which they can judge the performance of their landlords. The new social housing regulator, Oftenant, will be established at arm’s length from Government and separated from investment panels. It will be focused on the activities of registered social landlords and on what they have to offer to tenants. The Bill gives the regulator new powers to secure improvement in management and new measures that are more responsive than the nuclear options that are now available to the Housing Corporation.
Taking on board the comments made by the hon. Gentleman and his assiduous work on the matter, may I say to him that, across the board, housing associations are doing a good job. However, when they do not, it is important that we learn lessons. I hope that Simon Braid’s inquiry will help us to do just that.
Post Office Closures (Great Yarmouth)
1.30 pm
Mr. Anthony Wright (Great Yarmouth) (Lab): It is a pleasure to serve under your chairmanship again, Mr. Cook. I am sure that my hon. Friend the Minister has responded to many such debates over the past few months, and that he is well versed in his responses. To set the scene, this debate comes on the back of the difficulties that the Post Office faces across the UK. The Government’s commitment to support the network to the tune of £1.7 billion over the next three years is certainly to be welcomed, and is not seen as unimportant.
There has been an imbalance in the expectations of the Post Office’s closure programmes in different areas. I wish to make it perfectly clear where I stand on the proposals for my constituency. Most of the post offices there that might be closed are in urban areas, but two are in rural areas. I shall deal with each in turn.
We must not lose sight of the fact that this is nothing new. There has been a significant number of post office closures since 1979. From then to 1997, there were 3,500 closures, and there were no compensation packages for postmistresses and masters or for sub-postmistresses and masters. The current programme is different, because there is a compensation package for those people. However, what about the communities that are being left behind?
We can consider technology, and I am as guilty as most people of using direct debit, internet banking and such like, rarely going into the post office. No wonder post offices are making a loss. The figure being bandied around is that out of 12,500 or 13,000 post offices, only 4,000 make a profit. It is a bit disconcerting when the Opposition parties make points of political expediency, given that they say clearly in their campaign documents that they will prevent the closure of any profit-making post office. Under a Conservative Government, the post office network would be reduced to 4,000, which I do not want to happen.
I wish to go through the six post offices affected in my constituency and make the case that I shall make to the Post Office in the consultation process. There are two in rural areas, the first of which is in the very small community of West Somerton. It is open two mornings a week, I believe, for four hours on Monday and Friday mornings, but it is used extensively by that small community. By and large, it is a community without access to transport, including a bus service. Given the costs involved, I question whether the post office there should be part of the closure programme. I estimate that the savings on it would be in the region of £80 a week at most. On that basis, perhaps it would be worth while for the Post Office to consider the effect that its closure would have on the 30, 40 or 50 people, mainly pensioners, who rely on it to get their benefits.
The effect of the closure would go across into my neighbouring constituency of North Norfolk, where the small community of Hickling is suffering from the closure of its post office. A number of people there use the West Somerton post office, and that has not been taken into account. Without it, the nearest one would be at Winterton and the next nearest in Martham, some miles away. People could not rely on that. I suggest, as I will to the Post Office, that if the hours were to be reduced even further so that the post office were open
one morning a week as an outreach, that would contribute a little towards the savings required.
The next post office affected is in Stokesby, another small community that has about 260 people. The people there are slightly worse off, because they are really out on a limb. The community is mainly surrounded by water, and it is three miles from the closest post office. The Post Office’s access report states that in the case of both alternative post offices, the terrain between the branches is hilly and there is no street lighting or footpaths along the whole road. The nearest branch is 2.9 miles away in Acle, which is another constituency, and the second nearest 3.1 miles away in Filby. So can people go by bus? If they are lucky, there is a bus to Acle every two hours one way, and then they will probably have to wait another two hours to come back. On the other route, to Filby, there are buses at 8 o’clock, 10 o’clock, 1.30 pm and 2.47 pm. One can see the difficulties that there will be for the small community of Stokesby. Okay, only 100 people a week use that facility, but I suggest that that number increases in the summer months, because boats on the broads land there and holidaymakers use the facility.
I shall move on to discussing the town area and to a post office in the north of the town in Beresford road. I know that one, because my mother, who is a pensioner, uses it. People will say, “Well, you are going to support that one”, but I support every single one. I certainly do not put any more weight on that one than on the others. My mum tells me how she gets to the post office, which is probably a quarter or half a mile from where she lives. She struggles down there to get her pension and also to get her papers and other shopping from the local shop. If the post office closed, she would have to walk another 200 yd to the bus stop to catch the bus to the alternative branch. It is only about six or seven minutes away, on Salisbury road, but it would not lend itself to the significant increase in the number of people using it that would occur if people were asked to migrate there. It is expected that about 1,000 extra customers a week would migrate there, so there are serious issues to be addressed. A quarter of the people in that part of my constituency are pensioners, which is a high proportion.
Moving further into the town, one post office affected is in the town centre and another is on the other side of the river. The Northgate street post office is close to the town centre and is very busy. It handles a considerable number of people each week. I wish to mention it together with the Lichfield road branch, because the alternative branch to both is at WHSmith in the marketplace. In the past two weeks, I attempted to encourage the customers of both those branches to take part in an exercise by going to WHSmith at the same time and day as they would go to their normal branch to prove that WHSmith would not be accessible to the significant number of people involved. Unfortunately, or fortunately for the post offices, people remained loyal to their local branches. In fact, those branches had an uplift in their customer base. That shows the loyalty that people have to their local communities. In both those locations, there are rows of shops that rely to a certain extent on the local population and local business.
The bus stop is 300 yd to 400 yd away from the alternative branch, and the car parks are quite a way away and operate only on Mondays, Tuesdays and Thursdays. On the other days, a market operates and there are stalls on the car park. There is no parking
outside the branch, because the area is pedestrianised. The post office is right at the back of the building, and people have to weave their way through the shelves. Another disadvantage of asking customers to migrate to WHSmith is that during the summer months, the population of Great Yarmouth increases, probably threefold or fourfold. The number of people that mill around in the town centre is phenomenal. This branch of WHSmith, as a popular shop in a popular destination, would certainly experience difficulties. I would defy anyone, if there were two or three wheelchairs in the shop, to suggest that that is the right and proper place for people to go.
These two shops, in Northgate street and Lichfield road, have the full support of the community. As I have said, they are fairly busy and their closure would lead to something in the region of 8,000 to 9,000 people migrating to the WHSmith shop, unless, of course, the Post Office is again looking for a reduction in the number of people using a post office. I do not want to see that reduction; I want to see the Post Office grow. I want to see it taking forward what it has left to offer in terms of the open market and trying to encourage more people to use post offices.
I fear, however, that the number of people that we have lost over the last year or so—4 million, I understand—will be revisited next year and again we will say, “Sorry, we have lost another 3 million or 4 million”. Part of that loss will be due to the effects that these closures have had on particular communities.
The last post office that I want to talk about is the Springfield road post office. Again, it is on the other side of the river and the Post Office is encouraging people to go to the main post office on the high street in Gorleston-on-Sea. The Springfield road post office is also part of a shop and, by closing it, the Post Office would encourage up to 1,500 customers to migrate to the local shopping centre, where parking is certainly limited. The centre is very difficult for some people to access and there is a fair amount of hilly terrain, too. Such a change would be extremely difficult.
In all these cases, there is also the question of the criteria to be considered. That is where I have a particular problem, because the criterion in question states quite clearly:
“99% of the total population in deprived urban...areas across the UK to be within 1 mile of their nearest Post Office branch.”
Originally, I just thought that that was okay, but let us look at the vast majority of people in the deprived areas. We have one or two of the most deprived communities in the UK in my constituency, where some of these post offices up for closure are based. The sad thing is that, when the picture is taken across the UK, it is clear that in a constituency such as Great Yarmouth, which is a mix of urban and rural areas, the 99 per cent. criterion in question nationwide could result in a situation where as few as 75 per cent. of people are within a mile of a post office. That contrasts with largely urban areas, such as inner London, the metropolitan areas and the cities, where it is quite clearly possible for everybody to be within 1 mile of a post office.
If we take an average—I have not done the figures and I am sure that it would be very difficult to do so—the 99 per cent. criterion may well be justified. However, I make a plea: why should areas such as mine,
with the deprivation that they experience, have to suffer on the basis of a UK average? I respectfully ask the Minister to have another look at the criterion and consider whether it should apply to each area of closure rather than across the UK. That would be much fairer; why should my constituents have to walk further than a mile when people in the inner cities certainly have a post office within that distance?
This campaign has obviously benefited from uniting the various communities. When I have looked at the situation in many of the areas that will be affected, I have received hundreds and hundreds of letters and I have seen that petitions have been signed all over the place. The campaign ranges across all ages. For instance, in the communities of Lichfield and Cobham, there was an issue because there are two communities together. I received a letter from Jim West, the chairperson of the local Lichfield community group, that said:
“Not very long ago, the post office in Cobham was closed. We were given an assurance that our branch would therefore not be threatened.”
That branch in Cobham was within probably a quarter of a mile of the branch that was closed not very long ago, so the community in Lichfield were pretty miffed that another branch was going to be closed. The other factor is that the Lichfield branch is also separated from the other one by a river and a main road.
At the other extreme, even the pupils at the local schools are getting involved in the campaign, which shows how the whole community is involved. Just recently, I received 50 individual letters from pupils at the Edward Worlledge community middle school in Southtown. They were very concerned about the effect that post office closures would have on their parents and grandparents.
The campaign against post office closures is certainly gathering speed and strength. Every MP will no doubt have their own story as to why their post offices should remain open. However, what I am trying to do is to put together a case for each individual post office when I believe that that post office is genuinely needed, but also a case for trying to increase the trade and business of the post office network. I fear that, if the Post Office takes this particular action, it will, next year, drive people into greater use of IT and other technology and will keep them out of their local post office. We will reduce the number of customers even further. My fear is that, in the next few years, we will see another round of cuts because there will have been a further reduction in the number of people using the post office network.
There is another side to the issue. Has there been any consultation with the branches that will be regarded as the alternatives to those that are to be closed? Will they face difficulties with increased numbers of customers? A sub-postmaster at one of the branches that I have mentioned commented that the changes will create difficulties in his shop if so many people migrate to his shop. He will have to take on extra staff and probably look at other alternatives, too.
There are a number of issues that the Post Office needs to take on board. However, people can rest assured that I will be putting my comments forward in the consultation process and I sincerely hope that that process is not just a practice for the Post Office, but one that will see it taking seriously all the comments from wherever they come.
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