“The setting of the standard, the ten-year target, the allocation of the resources and the near achievement of the target can be regarded as a major success story”.
The National Housing Federation has said that the programme has
“undoubtedly helped to raise the quality of homes benefiting millions of tenants.”
However, as hon. Members have said today and, indeed, as the recommendations from the Committee’s report point out, there is still more to do. The standard should include a minimum energy efficiency rating, which is clearly important. The backlog needs to be cleared, and there should be funding to deliver both new homes and the maintenance of and improvements to existing stock.
The think-tank for London Councils has pointed out that London Councils remains concerned about the funding shortfall to deliver the decent homes programme. As my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) pointed out, London alone needs £2.5 billion to complete the programme, and about 10% of London’s stock is below the standard, which represents 46% of the national total. That is a major issue that clearly needs to be addressed.
In a series of letters to the Chair of the Committee, the Minister stated that
“the Government is constrained in its ability to commit to specific housing policies, including the way forward for tackling poor housing and energy efficiency.”
He went on to state in that letter, which he sent in July:
“The Government’s key priority is to devolve power from Whitehall to people, neighbourhoods, communities and…institutions”.
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“Councils need the freedom to make the best long term decision for their housing, and it is critical that reform is able to deliver that.”
Of course, that has been done in the context of unprecedented cuts in funding for local authorities. I would be interested to hear from the Minister how he thinks councils will be able to deliver the ambition that he set out in his letter, when he is responsible for imposing huge cuts. In the letter, he also referred to the green deal. Although the green deal is welcome, it is inadequate for addressing the need for energy efficiency in people’s homes.
In a second letter, the Minister stated:
“Throughout the spending review the Government has been guided by a commitment to fairness, protecting the most vulnerable people in our society and as far as possible protecting frontline services.”
However, the reality is that the cuts are impacting disproportionately on the poorest people in society. Local authorities with the greatest needs are bearing the biggest cuts, so I wonder how the Minister can square that statement with the reality of their funding decisions.
I am running short of time, so I will conclude simply by saying that if we compare the policies being pursued by the present Government with those of my right hon. Friend the Member for Wentworth and Dearne (John Healey), when he was the Minister with responsibility for housing, hon. Members will see that he published a paper that would have enabled the decent homes programme to have been completed. His proposal would have ensured that local authorities could keep 100% of the capital receipts and would have seen an expectation that at least 75% of those receipts were reinvested in housing. That would have been a boost not only for the people living in those areas, but for the construction sector and jobs. It would have helped to deliver the Government’s stated intention of a private sector-led recovery. There are many questions that the Minister needs to answer in relation to this whole agenda because, if the ambition of a private sector-led recovery is to be realised and if the interests of tenants are to be met, the Government need to consider a significant change in direction.
5.14 pm
The Minister for Housing and Local Government (Grant Shapps): It is a pleasure to serve under your chairmanship this afternoon, Mr Bone. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate—or, rather, the Backbench Committee on nominating it and the Chairman of the Select Committee on securing it. It has been a high-quality debate and, after listening to it for the past three hours, I know why. It started with a political back and forth in the opening few minutes, but it then settled down to be a most intelligent and well-argued debate, with people who are passionate about social housing. It has been very good. In that spirit, I will follow the same path.
Let us get the politics out of the way. We know that the money had run out and that it was no longer possible to continue borrowing money we did not have to build a greater deficit that our children and their kids would carry on paying for the rest of their lives. Something had to change. When the hon. Member for Sheffield South East spoke about “our cuts,” I had to resist
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shouting back, “But they are not ‘our’ cuts!”; they are the cuts that the previous Administration were not prepared to make.
I am delighted that that is out of the way, because I can now start to address, in as much detail as possible, the excellent comments that have been made this afternoon. I shall preface my comments by saying that, despite the economic environment in which we find ourselves, the decent homes programme has not been cut by anywhere near as much as the Chair of the Select Committee suggested. I want to pick him up on his twice-repeated claim that there has been a 50% reduction to the programme. That is untrue. A reduction was made to the programme under the previous Administration. My predecessor, the right hon. Member for Wentworth and Dearne (John Healey), raided the programme for £150 million in—I speak from memory—July 2009 to pay something towards the so-called housing pledge, which is the new build programme. That was the first cut to the decent homes programme.
I think I am right in saying that some £319 million was indicatively signalled to have been spent on the programme, but, despite these economic times and some tough decisions, we are still spending just over £2 billion on decent homes, which, thinking back to the spending review, is more than most commentators thought likely. It is divided into about £1.6 billion to local authorities and £500 million to help some of the organisations that are in transition having left local authorities. I just wanted to put that on record. It could be argued that the reduction is 15% or 20%, but not 50%.
Mr Betts: I have a note based on information from the scrutiny unit of the House, which indicated that the reduction was from £2.6 billion over three years to £2 billion over four. It said that that was a cut of 42% without taking account of inflation, so I think that my figure of a 50% cut is about right.
Grant Shapps: We could knock these figures back and forth, but I reject the idea that the cut is about 50%. I accept, however, that more money needs to be spent on decent homes.
Chris Williamson: Will the Minister give way?
Grant Shapps: I hope that the hon. Gentleman will not mind my making a little progress. Others have spoken for a lot longer than I will get to respond to the many points that have been raised.
We are putting in £2.1 billion, but I would estimate that we need about £3.5 billion to truly finish the programme. I expect that, by April, about 210,000 homes will still be in need of decent homes funding, and the programme throughout this Parliament may cover about 150,000 of them.
The Chair of the Select Committee also asked for greater flexibility for local authorities to, for example, put in a boiler but charge 0.5% more rent. That is a very sensible suggestion and it requires no intervention from me. Local authorities are absolutely within their rights to do that. The guideline rents that we currently provide mean that they already have flexibility, and the direction of policy in the Localism Bill, which is at Committee
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stage, is to do precisely what he says. It is an excellent idea and one of the very good suggestions that have been made.
My hon. Friend the Member for Carshalton and Wallington (Tom Brake) raised the issue—perhaps he did this inadvertently, but it also came up in a later exchange—of the value of ALMOs versus housing associations versus local authorities. I do not particularly want to enter into this debate, other than to say that, from a Government perspective, I have a completely neutral view on whether an ALMO is better than a local authority or a housing association. Indeed, there have been some very interesting exchanges throughout the afternoon, and they have all been argued from the individual perspectives of constituency MPs. We know that, at certain times, an ALMO can be very good or very bad, and the same can be said about a local authority or a housing association.
There are even arguments about the size of housing associations, from vast conglomerates—I have a great deal of sympathy with some of the comments about the distances sometimes involved—to some small ones. In my experience, having travelled around the country a lot, looking at different types of housing, there is no single prescription for the right size or shape of organisation to run housing.
The hon. Member for Stockport (Ann Coffey) made a number of interesting points. I was impressed in particular by her comments on the quality of the environment and on how important design is to the way people feel, which was picked up again by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), when he talked about walking into a block of flats and how the entranceway can make all the difference.
The hon. Member for Stockport also made the point about walking into the home of someone who has had the decent homes work done—the delighted tenant—and sharing in that delight. I am sure that, as constituency MPs, we have all been in that position. I put it on record that, in the previous Parliament, I was the Conservative Opposition Member who represented the most council tenants in the country—I have not checked for this Parliament. On many occasions, however, I have walked into a kitchen or bathroom and been greeted by the delighted tenant. It is an absolute pleasure.
I also put it on record that I believe in the decent homes programme. It was an achievement of the previous Government. I accept the comments of the hon. Member for Vauxhall (Kate Hoey) and others, including the hon. Member for Derby North (Chris Williamson), that it probably started four years too late, but it did a lot of good work. I also accept the arguments of the hon. Member for Islington North (Jeremy Corbyn) and others, that it sometimes carries on doing work where it is not quite required to do so, or doing it in a uniform or almost machine-like fashion, at times unnecessarily ripping out perfectly good accommodation or facilities, as mentioned by other Members.
My hon. Friend the Member for Wolverhampton South West (Paul Uppal) talked about the importance of apprenticeships. I absolutely agree with what I thought was a thoughtful contribution from him. We have a great opportunity, with today’s economic backdrop, to ensure that local skills are being used or upgraded to provide improvements for people’s homes. It is the
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perfect mix and combination, given the opportunity of the £2 billion-plus to ensure that it happens in the future.
The hon. Member for Lewisham East (Heidi Alexander) made a number of interesting points about estates still requiring regeneration. I offer to engage with the hon. Lady to listen to the problems and to be of as much assistance as possible. It is not easy, the money does not exist and we have had to make difficult decisions, as she and everyone else appreciates.
However, I wanted to correct one point in the hon. Lady’s speech, when she seemed to suggest she believed that the local authority would have to contribute 10% towards the costs of decent homes. That is not what the Government said. I said that if more than 10% of repairs were needed in order to reach decent homes standard—if there were more than 10% non-decent stock, in other words, which I believe would be the case in Lewisham—authorities can apply for decent homes funding. It is not that they are then expected to pitch in 10%, although in fact it might be a good idea for them to do so. I just wanted to ensure that that got on the record.
Tom Brake: The Minister mentioned estates that still need renovation. Can he confirm that it would be strange if ALMOs with two stars, which put a programme to Government that demonstrated their capacity to deliver and carry out that estate renovation, were not given some priority in the bids?
Grant Shapps: My hon. Friend is right to point out that what should count is the quality of the organisation, its ability to deliver and the need on the ground. I feel strongly that it is wrong to penalise tenants for whom it is almost impossible to do anything about the lousy management of their property, because they happen to have a useless landlord, and then penalise them again for that very fact.
My hon. Friend’s wish will come through in the work that will be done by the Homes and Communities Agency in assessing those bids, which will be taken further next month. It seems natural that those organisations that are well run and have a good plan will be more successful within the limited resources. If they are good, they are good. I do not think that two stars necessarily means that an organisation is good; it can all too often mean that it is good at ticking the right boxes, and employing too many consultants on too high a salary to jump through hoops, which is irrelevant to the lives of people on the ground. I am sure, however, that there will be a correlation.
In response to the hon. Member for Lewisham East, and to the many Members who raised this issue, the revenue account will be a vital part of the reform package. We have established that in our view the country does not have the money to completely finish the decent homes programmes—to make significant further progress during this Parliament—but we can carry out housing revenue account reform, and we are legislating for that right now in the Localism Bill, building on the work undertaken in the consultation by my predecessor, the
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right hon. Member for Wentworth and Dearne. One upshot of that will be an ability to plan for the renovation, repair and renewal of local authority stock for the next 30 years. I am very keen, as the hon. Member for Lewisham East pointed out, to get that provision through, and I look forward to support from right across the House in securing the progress of that part of the Bill. I do say to the hon. Lady that Lewisham’s chief executive could perhaps make a personal contribution by reducing his £192,000 salary. Times are tough, and I would have thought, as other Members have pointed out, that that would be a very good place to start.
The hon. Member for Islington North raised the point about two-star ALMOs. I have talked about how the system was unfair, and I am pleased to sweep it aside. In addition, I really do not mind if local authorities want to continue to manage their stock for ever. That is entirely their business, and this Government will cease the tricks of pushing local authority stocks into different forms of management. I sense from this debate that there is cross-party agreement on that matter, on the part of many MPs. The hon. Gentleman also mentioned the subject of ending lifetime tenure, and affordable rent, which he and I have discussed previously. The most important thing that we can do is to provide more homes and upgrade the homes that we have.
I have judged that, given that the previous Government put £17 billion into building more homes, after 13 years they ended up with a net loss of 45,000 homes. Yes, there was the right to buy and yes, pathfinder knocked down homes, but if we tried to use that maths again, we would discover that we needed £50 billion to £100 billion from the Treasury simply to build more homes in that way. In other words, something was not working, and we needed to find a different solution. Affordable rent is my version of that solution. We can now use the additional money, in the way that the Chairman of the Select Committee suggested we do for renovation, for building more homes, and that will be a sensible step forward.
My hon. Friend the Member for Loughborough (Nicky Morgan) made a number of important points, about the additional amounts of money sometimes required for homes built in different types of fabric—I know that the Homes and Communities Agency will take that issue on board—and, in common with several other Members, about round 6 bidding. Round 6 was never approved, so no one on the ground should have ever thought it was definitely going ahead. I will be meeting the hon. Member for Nottingham South (Lilian Greenwood), and I make the same offer to my hon. Friend and to Members across the House, to meet to talk about the issues and the possible ways forward.
I thought that one of the best speeches of the afternoon was made by the hon. Member for Vauxhall, who rightly pointed out so many of the common-sense realities of housing, and whose speech was devoid of any political back and forth. Many of the same issues were raised by other Members, but I thought that hers was a great contribution.
In response to the hon. Member for Nottingham South, I can say that I have visited Nottingham City Homes and have even had its chief executive, Chris Langstaff, to my office here in Parliament. I know the great work that the organisation does, and I know
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that that work will be able to continue. With the flexibility that we are now providing through localism, with money going locally rather than through larger regional organisations, and through the housing revenue account reform, organisations such as Nottingham City Homes will be able to continue to upgrade homes, albeit at perhaps a slightly different pace.
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My right hon. Friend the Member for Bermondsey and Old Southwark made a great contribution. He and I have discussed housing on many occasions.
5.30 pm
Sitting adjourned without Question put (Standing Order No. 10(11)).