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6 Nov 2008 : Column 169WH—continued

As I am sure my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Committee, will testify, when we travelled around the country, the Committee saw how section 106 agreements sometimes lead to the provision of nice-quality landscaped private sector housing in a development, but that somewhere at the back of the site—almost as an embarrassment—a few social housing units are tucked away so that no one can see them. In some cases, a wall is built around such units to separate them from the private housing and prevent too much contamination between the two lots of residents. That must stop. Local authorities must be
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required to ensure that where provision for affordable social housing is made, it is done in a way that does not lead to an obvious “us and them” feeling about the scheme. At a recent public meeting about how to develop a new site in my constituency, such an attitude was shown by a constituent who said to me, “We aren’t going to have any of those people living here, are we?” Unfortunately, those attitudes exist and local authorities have to stand up to them and ensure that we have mixed communities.

On mixed communities, I want to discuss the point that the Committee made about the right to buy. We could all rewrite history in relation to the right to buy. When I was a member of Sheffield council, I was chairman of housing at the time of right to buy and we resisted it. I accept that there is a place for the right to buy and I am close to agreeing with the hon. Member for Chesterfield on the matter, which worries me slightly. I can see that the right to buy has helped some people on to the housing ladder and that it has introduced a mixed tenure into some areas that were monolithic and contained only council housing—we had enormous estates in Sheffield. However, there is a disproportionate tendency for right to buy to prevail on smaller estates that are in the nicest areas. That has obviously happened because such areas are where people want to buy—they have nice properties that will increase in value after purchase.

Even in urban communities, we are in danger of creating areas in which, although there were relatively few council houses to begin with—probably only 20 per cent. of the stock—more than half of those houses are sold. In such areas, there is now only a residual number of council houses or, in some cases, where stock transfers have taken place, social rented houses are owned by a housing association. In those circumstances, if the right to buy is simply allowed to continue, regardless of the demand for rented properties and the limited supply, that will ultimately have an effect that is opposite to the creation of mixed communities. Monolithic communities of owner-occupiers will be created and there will not be any opportunity for people who cannot afford to buy to live in those areas.

That is a real worry in parts of my constituency—for example, in the old mining village of Mosborough. That village has a heart to it, and part of that heart is a small number of rented properties that are owned by Sheffield Homes, which is an ALMO. Enormous numbers of private homes have been built in the area and many people have said to me, “I’m now quite well off and have moved on and got my private home, but I come from a poor background. I’d like my mum and dad to come and live near us, but they are council tenants and there aren’t any council properties in the area, so we can’t live in the same area together.” That is a real problem.

The Committee referred to the Netherlands solution: where there is a shortage of houses to rent in an area, a housing strategy ought to be developed with the local council and housing providers. That is particularly the case in relation to certain types of houses, as there might be plenty of flats but a shortage of family homes. The strategy should state that because of the enormous shortages, if we continue with the right to buy, no houses of a particular type will be left to rent. In those areas that are affected we should be able to suspend the
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right to buy, at least for certain property types, to try to ensure that we allow people who cannot afford to buy to live in those areas and keep a mixed community. The Government have said they will consider that matter in their response, which I welcome. I hope that they will look at that issue and introduce policy changes.

I hope that we can return to a situation in which councils and ALMOs can start building houses. It is possible to access the funds that the Government have made available, and there are three pilot projects. Again, I would be grateful if my right hon. Friend the Minister explained where we have got to with the pilot projects that were established to try and let ALMOs build houses—if she is unable to do so today, would she do so in due course? I know that Sheffield Homes, together with Sheffield council, was awarded a social housing grant last autumn. I am not aware yet whether they have an agreed plan for what to do with the money, let alone whether they have started building any homes. After a year of a chronic housing shortage, I understand that that grant is still sitting somewhere in the treasury coffers in Sheffield and that it is not actually doing anything.

It is important to introduce pilot projects, and I welcome the fact that the Government have decided not to include them in the housing revenue account—that was an important step. However, while I am on that subject, the housing revenue account is the biggest obstacle to making any sense of housing finance in this country. A review is under way on and, the other day, my right hon. Friend the Minister told us, when giving evidence to the Committee, that it will be next year before we sort the matter out. However, I cannot stress too strongly—and everyone else who has spoken has mentioned this—that in terms of the rules, the housing revenue account is a disaster, as authorities have no idea where they will be in future years.

There is the possibility of redundancies at Sheffield Homes because its subsidy system has changed drastically over a three-year period. There is an inability to plan ahead and there is no relationship between the service its tenants receive and the rents they pay. Sheffield Homes cannot say to its tenants, “We’ll improve the service if we can increase rents by £1 a week.” Neither can it say to an individual tenant, “We’ll put a central heating system in if we can increase your rent by £2 or £3 a week.” There is no connection between the service provided and the rent charged.

It is a bureaucratic nightmare which, I accept, is difficult to resolve because there are losers and winners— unless the Treasury can be persuaded to put some funding in to unscramble the whole thing and get back to having a more direct relationship between what tenants pay and the service that they receive. No doubt my right hon. Friend has been brought up to speed on some of these things in the past few weeks, but I am sure it is one of the more complicated things she has had to consider so far. That issue is a nightmare and it needs to be addressed.

Paul Holmes: On that point, the review is under way, but it might take a year to complete and more time to implement—if it is possible to implement it. However, in the meantime, the Government have announced that for the next two years they want to carry on and make
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the situation worse by increasing rents by 6.2 per cent., which is well above inflation. In Chesterfield’s case, increasing the clawback means that every penny will go to the Government rather than into tenants’ houses. Does the hon. Gentleman agree that the Government should suspend that increase until the review has been completed, rather than digging a deeper and deeper hole?

Mr. Betts: The system is completely inadequate. Unfortunately, as long as the system exists, the Government will use it and there will continue to be perverse consequences. I do not think that the Government should set rents at a national level—that is the problem with the housing revenue account. I just hope that we can get out of it as quickly as possible, as it is a disaster. The previous two Housing Ministers recognised the principle that we need to do something about it; it is a question of finding the mechanism to achieve that.

With regard to other issues that needed to be addressed, we mentioned the Hills report, and we look forward to the Government’s recommendations. In relation to allocation policies, it is important that we make best use of the housing stock. There is a problem with under-occupation. We need to make transfers easier for people who have outgrown their family houses because their children have moved on and there are now only one or two older people living in them. If we can make it easier for them to transfer to purpose-built elderly persons’ accommodation by building more such accommodation, that would be useful. I very much welcome Hills’s comments about getting more recognition of such matters in housing allocation systems. I understand that that is very difficult to do in London, because the crisis is even more severe there, but in places such as Sheffield we could give more priority to people who want to move for good reasons.

The classic case is the elderly couple who say, “We look after our grandkids when their parents go to work and it would be easier if they lived nearer to us. A house has become available down the road and they only live four miles away. Why can’t they move?” Then suddenly they find that a homeless family who have been on the list for a few weeks turn up and occupy that house as the new tenants. Often, people just do not understand that. They say, “Well, why couldn’t that homeless family, who have been on the list for only a few weeks, move to the house that my son and daughter-in-law were in, so that they could move nearer to us?”

There is a logic to that thinking. We need more flexible allocation policies, because transfers have almost dried up. People know that if they are allocated a house as an ALMO tenant in Sheffield, they are almost stuck there. The chances of being able to move or of having a choice to move anytime in the future have almost gone. There are issues to be addressed in that respect. As has been said, decent homes has been a wonderful policy. The other day, I was with an elderly couple whom I have known for years. They moved into their pensioners’ flat and then had the kitchen and bathroom done up and new windows put in. They think that all their Christmases have come at once. They are absolutely delighted. I saw the smiles on their faces and their great pride in their home. Sheffield Homes has done an excellent job; the quality of the work is good.

We need to know where we are going from here, because ALMOs such as Sheffield Homes are thinking
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about their work programme for the future, and are again looking at reducing staff. It is always a problem in the construction industry that there are peaks and troughs in the work load, which make it impossible to continue such programmes. I welcome the setting up of the Tenant Services Authority. We had a good Select Committee evidence session with the new chief executive and chair the other day. I hope that they will drive up the quality of management in many housing associations; the Housing Corporation has not been tough enough on those issues. I welcome the commitment that they have given, which we explored in our evidence session, to try to link the funding of the building of new houses by housing associations to those housing associations that have a good track record of management. In the past, there does not seem to have been a great link-up and associations with poor management records often received funding to build more houses.

I look forward to ALMOs coming under the TSA remit, to which I the Government are committed, perhaps in the next two years, so that we have a consistent regulatory approach. The TSA can do quite a lot to link housing associations and ALMOs together, so that there is greater co-ordination of management approaches, particularly on open space or in areas where housing associations have very few properties and do not have a local presence. In such circumstances, they can contract out their management to other associations or ALMOs. I hope that the TSA will encourage them to go about that process to improve management quality. We recommended that the housing ombudsman should cover all aspects of housing, including local authorities and ALMOs, so that there is a consistent approach in relation to the ombudsman service as well.

I shall make a few comments about the private sector. It is such a mixed bag of housing of differing quality, and a more consistent approach is needed. I am pleased that the Rugg recommendations largely go along with our recommendation of a light- touch licensing arrangement for all private sector housing, which would be a massive step forward. At the same time, the Government should consider improving the licensing arrangements for houses in multiple occupation. The definition whereby there must be five persons or more, or three storeys or more, before an HMO qualifies to be licensed under the arrangements is far too narrow. Many HMOs in Sheffield do not have three storeys, but they still need to be part of the licensing arrangements. I hope that the Government will reconsider that. I hope that they will also accept the Rugg recommendation on the regulation of letting and management agents. It is perverse that if someone buys a house through an estate agent, they have access to a redress scheme, but if the same agent lets them a house, they do not have access to such a scheme. We should put that right.

Another issue arising in the private sector is a particular problem in London. I think that we were all shocked when we went to the flat in Westminster and talked to the woman there. Her rent had just been increased to £400 a week for a property that had been built by the local authority with public funding. It had been bought under the right to buy, sold on to a private landlord and then passed back to the local authority to be let to a homeless family and managed by a housing association. [Interruption.] That is quite right. The public sector was paying £400 a week in housing benefit to keep the person in the property, which is absolute nonsense.

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Jeremy Corbyn: And it was built by the public in the first place.

Mr. Betts: Indeed. What we saw in evidence from Local Space, which is operating in a number of London boroughs, is that that organisation has established a housing association that accesses exactly the same money as the private landlord would have accessed and it buys properties and allocates them, through the local authority, to homeless families. It uses the benefits that are provided by the Government, through the local authority, to purchase properties that will eventually come back as part of the social housing stock. I know that there are difficulties: it is still operating on very high rent levels, which creates the disincentive-to-work problem, so it is not a perfect solution, but in terms of money going in to buy the houses for the public sector rather than going into the profits of a private landlord, it is at least a significant and different way forward. The Government have had a look at that, and I think that they have generally welcomed it. I am sure that we could encourage such a system in other parts of the country as well.

An issue that we did not discuss very much, but which is clearly back on the agenda, is energy efficiency. In the past, the Select Committee was critical of the fact that the decent homes standards did not go far enough on energy efficiency. I raised that point in the Committee the other day and I will raise it again. Everyone welcomes the additional money available for energy efficiency. We welcome the Warm Front plans, whereby people who are in priority need because they are on benefit or are pensioners in the private sector, whether they are owner-occupiers or private tenants, can access funding if they have out-of-date and inefficient heating systems to install new systems.

That money, however, is not available to social housing tenants. That is unfair, and it is discriminatory. These are some of the poorest people in the community, and for all the insulation that is put in, if people still have an inefficient heating system, they will be in fuel poverty. The Government could act quickly to extend those schemes to social housing tenants, then consider standards of energy efficiency more generally when we come on to consider decent homes plus, which I hope the Government will eventually announce.

I think that we did a good job. I particularly congratulate my hon. Friend the Member for Milton Keynes, South-West, who chairs the Committee and went to enormous trouble to ensure that we had a comprehensive set of witnesses and that a lot of evidence taking was done outside the House, in various communities up and down the country. We made many recommendations, but I will just emphasise the point on which I do not agree with the hon. Member for Chesterfield. That is not a condemnation of Government housing policy but recognition of the fact that many good things have been done, but there are still many big issues to be tackled. That is what the Committee is suggesting to the Government. We still have a lot more to do and we look forward to a positive response.

4.18 pm

Jeremy Corbyn (Islington, North) (Lab): First, I welcome my right hon. Friend the Minister to her new position, in which she is responsible for housing policy. I very much welcome that and look forward to hearing what
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she has to say. Having been in the House even longer than I have, she is well aware of the enormous pressures and needs that exist in relation to housing. They come up in every advice surgery, which MPs hold regularly.

I want to make a number of points, but I shall start with a general observation. In this country, there is a national obsession with home ownership that does not apply to any other country in Europe. Government policy, banking policy and everything else is directed towards home ownership. The assumption was that with home ownership, people automatically made themselves richer throughout that period—and through most periods since the second world war that has been the case. Now, for most of the country, it is certainly not the case.

We treat rented accommodation, whether council, housing association or private rented, as an inferior form of living, and those who live there are condemned by people who say, “Well, do you know they still rent their own home?” or “They’re still in casual housing.” We need to get away from that mindset and those attitudes. We need to ensure that everyone has somewhere decent and affordable to live, and we must try to reduce the use of that kind of language.

It is no accident that both Islington Members are here this afternoon. We represent inner-city communities, which have an interesting combination of people. Some in our boroughs are extremely rich—they have the image of being wealthy, aspirant people. The reality, however, is that the majority of people are not wealthy. Unemployment is well above the regional and national averages, and the housing crisis is acute and serious for many. In common with other London MPs, we have the phenomenon of very poor people living in grossly overcrowded accommodation literally next door to someone in a £1 million house. That sort of social division is getting worse across the piece.

My advice surgery, like those of my hon. Friend the Member for Islington, South and Finsbury (Emily Thornberry) and others, is dominated by people who live in appalling conditions. People living in grossly overcrowded accommodation or in private rented accommodation have a sense of hopelessness. Although some policies suggest that they should move away from crowded inner-city areas and live somewhere else, it is not as simple as that. If they have family connections, if they wish to look after older relatives or if they have education or careers to follow, it is not that simple to move. We must ensure that public policy operates in a way that provides housing for those who desperately need it.

There are three general housing matters that I want to mention. My community, like others, has seen a big increase in the number of private rented properties over the past 10 to 20 years. The number of places offered for social rent either by the council or by housing associations has consistently fallen throughout that period, mostly as a result of right to buy, although demand for right to buy has more or less disappeared of late. There has been a slight increase in social rented accommodation, entirely through housing associations, although I welcome the fact that my local authority is, for the first time, about to build 100 council homes in the borough.

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The one sector that has increased phenomenally is the private rented sector. In my constituency, roughly one third of the population own their own properties; the rest are a combination of council and housing association or private rented properties. Private rented accommodation varies between the good, the adequate, the awful, the truly appalling and a national disgrace. I would be grateful if the Minister could give us some hope on the latter types.

Many people living in private rented accommodation come to my surgery, and even if they are on housing benefit, I always ask what rent they are paying. Some people do not know, so I have to dig through the paperwork and find out from their housing benefit papers. The highest that I have come across is £425 a week for a former local authority property, but the local authority property next door is rented every week to a local authority tenant for about £110 a week. As my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) said, who gets the difference? The private landlord is making £300 a week. Frankly, he does not deserve it. The place is not particularly well managed. It is an outrage. We are paying £300 a week, an excessive subsidy, to someone who was fortunate enough to be able to buy the property under the right-to-buy scheme. It is immoral.

Then one moves into the private rented sector. Victorian houses have been bought up by landlords at various times and converted into three, four or five flats to absolutely minimal standards—just enough to get through building control regulations—and with no energy efficiency measures and so on. The landlords do not bother too much with maintenance, because they know perfectly well that the local authority is no longer housing new applicants in local authority or housing association properties. Local authorities have introduced an arbitrary date—in my borough it is 2005—and said that after that date people will be allocated housing only in the private rented sector.

As a result, families are placed in private sector rented flats. The rent could be anything from double the local authority equivalent to three or four times that sum, depending on what the landlords can get away with. The condition of many of those places is disgusting. They are rat-infested, mice-infested, and there is a lack of repairs and so on. The tenants, many of whom are vulnerable, are frightened. They are frightened to contact the landlord, and they are frightened to argue because they do not know what will happen as a result. We are paying the rent through housing benefit, and we are subsidising the worst sort of spiv landlord, whose tenants are living in disgraceful conditions. What is going on is plain wrong.

Then I think, “Hang on. For £300 a week I could get a very large mortgage.” Instead, we are throwing the money down the drain and into the private sector. Because the mindset of public policy is inadequate, there is no investment in housing for people in desperate social need. I would be grateful if the Minister were to acknowledge the problem—I am sure that she will—and acknowledge the need for greater control on the condition of those properties.

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