Examination of Witnesses (Question Numbers
140-159)
RT HON
HAZEL BLEARS
MP, RT HON
MARGARET BECKETT
MP AND RT
HON JOHN
HEALEY MP
27 OCTOBER 2008
Q140 Anne Main: So it is government
advice but you do not know about it.
Margaret Beckett: It is slightly
oddly phrased, I accept. I am sure there is a clear definition
of what it means but I do not have it in my head.
Q141 Anne Main: Could you write to
the Committee?
Margaret Beckett: I will be very
happy to do that. Whoever wrote the phrase can explain it to you
and to me.
Q142 Mr Olner: I think all of us
from wherever we represent can see a huge slow down in the houses
that have been built and are standing vacant. I just wonder, Minister,
what plans you have to advise local authorities and give them
additional borrowing requirements so that they can purchase these
empty properties, move people in from a massively increasing housing
waiting list and help the building industry as well.
Margaret Beckett: As I am sure
you know we have already made quite substantial resources available
since the first steps were taken in May. We are at a stage now
where people are assessing what the problem is, where builders
have been invited to come forward to put a bid in, for the properties
to be purchased and so on. I think we are at the early stages
of seeing that. I will not disguise from you that we are looking
to see how that will go, how speedily it will go and whether there
are other areas where more can be done. We are somewhat in the
early stages and most of these programmes have not yet come through
and come into fruition. That is something we will want to assess
and keep very closely under review.
Q143 Mr Betts: Minister, welcome
to your new position. The package measures the Government put
together I think some of us think are laudable but probably not
sufficient and maybe that will become clearer with time. In terms
of the measures to try to help avoid repossessions, as I understand
it it is aimed to try to stop about 6,000 repossessions but the
forecast is there will probably be about 45,000 repossessions
this year. Is that really sufficient to deal with the growing
scale of the problem that we are now beginning to see?
Margaret Beckett: I take your
point entirely but as I understand it the position is that of
the repossessions which are forecast—we are not yet seeing
that but they are forecast by the Council of Mortgage Lenders—some
9000 or so are thought likely by officials, by those who assess
these matters as experts, to come into the category of people
who might become homeless. The programme that has been put forward
is designed particularly to try to address that and also to address
some of the need which is likely to be met from people who have
lost their jobs altogether and become dependent on income support
for mortgage interest. I accept that this is a beginning. We will
have to keep it under review but, as I say, we are at the early
stages as I am sure you know and it is a source of some regret
to me and indeed I will not disguise from the Committee that I
have asked officials to look again very carefully at the process—which
is a difficult and complex process—to see if we can shorten
it at all, but the scheme that you are referring to that has been
proposed will itself not come into being until January. It is
a little early to say that we know how we could do much more even
if the resources were readily available.
Q144 Mr Betts: As I understand it
the 9000 referred to are actually households who would be re-housed
as homeless which is slightly different because that would not
include couples or single people who might be worthy of assistance
if we can get the system to work.
Margaret Beckett: That is right.
Q145 Mr Betts: It may well be that
some people would simply say, "Yes, if you save my home I
will become a tenant and pay the rent on it rather than pay a
mortgage" which I think is one element of the scheme. Another
possibility people might find more attractive is that they keep
some share in their home by it becoming a shared ownership property.
The procedures are enormously complicated and can really put people
off, not least the real complications—I know it is not strictly
your responsibility but it is so much a part of it I wonder if
you would a look at it—of the relationship between benefits
and tax credit arrangements, people who have part of a share and
part of a rental arrangement on their property. It is really complicated
and given that many of the people we are looking at will be in
financial difficulty would you have a look at that with colleagues
in other departments and try to sort something out?
Margaret Beckett: I think you
are absolutely right. It is a very important issue and I am grateful
to you for flagging it up in quite that way. I completely accept
the starting point you made, if I can put it like that, that of
course all of us would sympathise with people who do not wish
to let go of the foothold they have got on the ladder of housing
ownership and it is indeed envisaged that that possibility can
be there. There will be a process of assessment of their position,
of debt advice to them, assessment of what they can afford and
what is the best option for them and of course this will all be
ultimately their choice, nobody can force any of this on them.
I completely accept that although we hope that that can be done
in a matter of some two or three months once this scheme is properly
up and running, the more we get into areas of the impact of housing
benefit, of tax credits and so on, the more complex it is likely
to be. I am grateful to you for the reminder; it is a very important
point.
Q146 Mr Betts: In terms of the points
Mr Olner was raising and just to move onto them, another element
is the possibility for local authorities to buy up empty homes
or even start building homes at local level. Is the Department
now actively asking local authorities to come up with funds for
their areas? It seems to me that they ought to have knowledge
on the ground and they ought to be putting bids in—hopefully
they have bids in now—if this thing is going to work and
move quickly to help local economies as well as the housing situation.
Margaret Beckett: Indeed. As you
know we have brought forward funding for social housing and I
hope that everyone is looking to reassess what the position is
and looking to see what they could do because, as I said to the
Committee at the beginning, we are conscious, even if Mr George
is right and there is some impact of this situation on housing
demand, there will still be a very substantial level of housing
need.
Q147 Mr Betts: Are local authorities
actively being asked to put in plans?
Margaret Beckett: I am not sure
where they are actively being asked but it is something I will
check.
Q148 Mr Betts: I would just like
to ask about the issue of funding for this package of measures.
Following on from the point that was raised about the Regional
Development Agencies, I have no doubt there was consultation with
them but the Chief Executive of Yorkshire Forward is not exactly
singing and dancing with delight about the impact on the funding
available to Yorkshire Forward at this stage to do what is probably
their primary job and that is to assist business, particularly
small businesses, at a time of great pressure and great difficulty
for them. Can we have another look at them? I absolutely support
extra money for housing at this time but to find even an element
of that money by taking it away from assisting small businesses
I think is taking it from one area of real need to give to another
area of real need.
Margaret Beckett: I take your
point entirely and I have always been, I hope, very sympathetic
to the problems of small and medium sized enterprises, but I would
say just two things. First of all of course I think only about
£10 million of that funding has come from funds for next
year and the bulk of it has come from the subsequent year. Although
I completely understand that SMEs and regional bodies like Yorkshire
Forward are disappointed about their forward planning, I doubt
how much that would have been set in stone, to be quite honest,
at such a distance. We are not just talking about construction
itself, there is a plethora of small businesses: suppliers, retailers
and so on around housing construction and supply, who will of
course benefit if we are able, as a result of this, to even out
some of the peaks and troughs in the market.
Q149 Mr Betts: Could I suggest a
way out of the dilemma which I think you might be facing? If we
need to try and get more money from housing, we need to try to
make sure we do not take it away from the RDAs. There is a forecast
that has been made that the estimate of £600 million of the
likely cost of the changes in stamp duty probably will not materialise
because there will be far fewer housing transactions and the actual
cost might be nearer £100 million. If the cost is less than
£600 million can we not transfer that money? Is there flexibility
there to transfer some of that money to real housing needs and
to probably maybe give some money back to the RDAs?
Margaret Beckett: Not for the
first time, Mr Betts, I am very grateful for the creativity of
colleagues. We could certainly try it on the Treasury but whether
we succeed is quite another matter.
Mr Betts: If you let us know we will
offer some support.
Q150 Chair: Can we just have two
bits of clarification? One is the money that has been moved forward
from the RDAs into housing, that is an actual reduction in the
budget for the RDAs in the three year period.
Margaret Beckett: Yes.
Q151 Chair: The second issue, along
with the creative accounting suggestions, have you followed up
the suggestion of the Chief Executive of English Partnerships
that now is a very good moment for the Government, through EP,
to be buying land for future development because they will get
a very good bargain for the tax payer?
Margaret Beckett: I have indeed
had my first meeting with the people from English Partnerships
who will very shortly of course be the new agency. They are doing
a lot of thinking and creatively also; I am encouraging them to
do as much as they can.
Q152 Chair: If, by buying land now
they free up money, that would be some more money you could put
back into RDAs to make up the difference.
Margaret Beckett: I have taken
careful note of this Committee's keen interest in giving money
back to RDAs.
Q153 Anne Main: My understanding
of the figures was £25 million from the budget from 2009-10
and £275 million—a total of £300 million not the
£10 million which the Minister may have indicated.
Margaret Beckett: You are quite
correct and I apologise to the Committee. Unfortunately there
are so many numbers buzzing around my head after a couple of weeks
that occasionally I confuse one small amount with another. All
I am saying is that even though it is £25 million rather
than £10 million it is not until next year, it is not in
their present planning.
Q154 Sir Paul Beresford: Is there
any more money being brought forward from any other little pockets,
et cetera?
Margaret Beckett: Not at the moment.
Chair: Can we move on, Mr Cummings, to
eco-towns?
Q155 John Cummings: Is it the Government's
intention to still promote ten eco-towns even though three of
the original applications have been withdrawn?
Margaret Beckett: Yes. Obviously
we are at a fairly early stage in this programme and certainly
we are at much too early a stage to conclude that this is something
that cannot be achieved. I read some very interesting material
in one of the weekend papers which seemed to imply that conclusions
had been reached; where they have been reached I have no idea
but they are not in my head or I think in the Secretary of State's.
All I can say to you is that we are at a somewhat early stage;
we had the very first stage of consultation. That in itself has
provoked a very substantial response which we welcome and we are
continuing with five in the early stages with a hope that we will
be able to identify ten at a later stage.
Q156 Mr Betts: I am at a loss, Minister,
to understand the fact that you say you are at a very preliminary
stage and yet the report was due out at the beginning of 2009,
indeed it should have been prepared this month, so where precisely
are we?
Margaret Beckett: We have had
the first stage of consultation. As I say, that provoked a more
substantial response than I think people had perhaps initially
anticipated. People have taken a great deal of time to assess
that response and to give it the proper amount of thought that
I know this Committee would want to see. We are now preparing
a draft PBS and a draft sustainability appraisal. That, I hope,
will be published in the not too distant future. That will be
in draft; it will include—as you quite rightly say—some
of those that were initially thought to be areas of interest but
which have been withdrawn. When all of that has gone out and people
have had time to think about and respond to that, then in the
coming year we would hope to produce something more along the
lines of a final document. However, even then what will be identified
are areas which are thought to have the potential to be good eco-towns.
Any specific proposals would then have to go through all the plethora
of planning applications and so on which the Committee would,
I know, expect. That is why I say we are at an early stage. There
is a tendency for people to talk and it is a sort of shorthand,
as if this is all going to be decided tomorrow; it is not.
Q157 John Cummings: So you are confident
that the target for five eco-towns by 2016 and ten by 2020 under
the present economic circumstances is sustainable?
Margaret Beckett: We do not have
anything or anyone coming forward at the present time to say that
this is a reason why all of this has to be abandoned, not least
because of the point that I just made to you, that those who are
more directly engaged, those who are considering bidding, whether
from the private sector or local authority interest and so on,
are mindful of the fact that we are talking quite a long timescale.
Chair: Clive, can you go onto Decent
Homes?
Q158 Mr Betts: I think we would all
probably agree that the Decent Homes programme has been an enormous
success not just in terms of the numbers but you only have to
go through the door of a local constituent and they cannot wait
to show you their new bathroom or new kitchen in which they have,
quite rightly, great pride. What is the thinking for after Decent
Homes, Decent Homes Plus, not least because the tenants are going
to want to make sure those homes continue to be maintained to
a high standard and improved if possible? That is going to need
more capital resources. We have organisations, very highly starred
ALMOs such as Sheffield Homes, who are looking now to lay staff
off because the Decent Homes programme has come to an end. Is
it possible to bring forward any successor before the next spending
review so we can start thinking where we are going to on this
issue?
Margaret Beckett: It would be
wrong of me to suggest that we can hurry forward I think. As I
think the Committee will know it is in fact considerations like
what follows Decent Homes and what will be required and expected
in terms of good maintenance and indeed improvement going forward
of the housing stock. It is partly those considerations that have
lain behind the decision to have a review of housing finance.
I think the Committee is well aware this is something being undertaken
jointly with the Treasury. It is such an important issue I would
not want to rush it, even though I completely understand and have
great sympathy with the point that you make and people's wish
to plan ahead and have more insight. I think the best thing I
can say is that it is precisely because everyone is taking so
seriously the need to do things to follow Decent Homes and not
simply to say, "Well that's it, we've done, end of story"
that it will take time to assess. I am sorry I cannot tell you
that I think it will be easy to bring it forward but what I can
tell you is what I think you are most concerned about is that
we are looking to see what can come in the future, not least because
we are very mindful of the problems that were experienced right
at the beginning when of course there was a substantial backlog—some
£19 billion I think—of dereliction, one might call
it; indeed, one might call it investing while the sun shone.
Q159 Mr Betts: You also mentioned
the whole review of housing finance and that is the other real
difficulty facing local councils and ALMOs. It is just the unpredictability
of where they are going to be in the changing financial situation,
nothing to do with their own performance. Again Sheffield Homes
are looking at further redundancies because of the change in their
housing subsidy situation and it cannot be right that as well
as employees tenants suffer because of these almost unpredictable
changes.
Margaret Beckett: I am absolutely
mindful, whatever the agency or organisation, of the need for
the greatest possible degree of stability and continuity, or ability
to plan sustainability for the future. That is part of what we
will be thinking about as we look at the review of housing finance.
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