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Baroness Hanham: My Lords, while I thank the noble Baroness, Lady Scott of Needham Market, for her Question, the short answer should be "None". It has long been the policy of governments of both parties to reduce the direct responsibility of local councils for the provision and management of housing. The direct encouragement to transfer ownership of housing estates, either to housing associations or arm's-length management organisations, run externally or by the tenants, was a policy started by the Conservative government as far back as 1988 and embraced by this Government.

I declare my interest in this matter, as a member of a London local authority—the Royal Borough of Kensington and Chelsea—and as a former chairman of a housing committee. My council was one of the innovators of the development of relationships
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between the council and its tenants and their involvement in the day-to-day management of their homes. It formed one of the first tenant management organisations in the country, which became responsible for the entire council housing stock well in advance of the establishment of arm's-length management organisations; it has now become one. It has, subsequently, been successful in benefiting from grants to meet the decent homes standard. Other investment has enabled considerable improvements to be made to the properties. That investment was simply not available to local councils in anything like the sums needed to maintain individual properties and estates to an acceptable standard. Tenants are now in charge of the management of their homes and are able to make significant decisions on their future.

The reason why, in my council, the management was initially carried out by a tenants' management organisation rather than through a large-scale voluntary transfer was because of the point made by the noble Baroness, Lady Scott—the tenants' reluctance to lose their relationship with the council. That factor has been prayed in aid by others outside with regard to having a fourth option to the Sustainable Communities Plan of maintaining council ownership. When an ALMO was ultimately formed, council input was maintained, and still is, by the presence of councils and by tenants on the ALMO board.

While the noble Baroness, Lady Scott, is encouraging when it comes to council-owned housing, time has moved on. We need to see how policies can be developed which enable people to be individually more in control of the property they inhabit—the breaking up of large estates, much wider use of shared ownership, the return to greater provision, and possibly the expansion of some form of right to buy, which was disgracefully and dramatically curtailed by the Deputy Prime Minister.

As the noble Baroness, Lady Scott, said, the 2003 sustainable communities strategy contained three points. But the retention and management of local authorities' stock, as a fourth option, seems somewhat redundant in the face of the Government's policies. There is little financial support available to local authorities to provide council housing and/or to renew and maintain their stock. Despite what the noble Lord, Lord Whitty, said, much council housing was of extremely poor quality, and the design of many estates was dreadful. The difficulty of management and the lack of choice for tenants—historically the problems associated with council-run housing—do not seem likely to be reversed.

The aspirations for a return to the glory days of universal council housing provision are, I believe, misplaced. What is not misplaced, however, is any concern over the role that local authorities must and should play in ensuring that housing provision in their areas fulfils the requirements for housing their communities. The government policy—one upheld in the Barker report, which I presume we shall have an opportunity to discuss at some stage—of leaving
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regional bodies to decide on the number and siting of such developments is simply not the answer. Decisions need to be made by local authorities themselves: those who are responsible to their electors and who have the responsibility for leading their own communities.

Having said that, even with the extension of the ownership and providers of affordable housing, the policies being espoused under the Government's sustainable community plans for the building of hundreds of thousands of new homes—encouraged by Kate Barker again in her report—raises enormous questions about how to ensure that this housing does not fall into the trap of former times. While we are urged to build at high density and on brownfield sites, it is clear that, by and large, people do not want to live crammed together in high-density estates; that despite many pious words uttered in innumerable debates, the infrastructure for both social and private developments being carried out under the sustainable community plans is far from adequate and in many cases is simply not there—in relation to schools, shops, hospitals, roads and so on. Local authorities need to ensure that that is provided.

There is widespread concern about the amount, affordability, siting and design of accommodation to meet future needs. Tonight's debate has centred on some of these but there is much more to discuss and consider before irrevocable decisions are made. But those decisions must allow for the widest possible choice. I take up the point raised by the noble Lord, Lord Oakeshott. Choice does not seem to figure strongly in housing; and it must. The choice of tenure and ownership, and options for both, need to be on the table. I go back to all the words about localism. Local authorities need to be closely involved even if they do not themselves directly provide the housing.

8.26 pm

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Baroness Andrews): My Lords, it has been, predictably, an interesting debate for many reasons. It is good to see the Liberal Democrats turning out in force to support the attack on the Government, aided by my noble friend Lord Whitty. I am sure that is because he has a bad cold: my noble friend is usually more gentle with the Government. It is a welcome debate because it gives me an opportunity to put some minds at rest and to address some of the questions. Those were summed up by the question asked by the noble Lord, Lord Bradshaw: where is the vision? In some quarters, the language has been a little exaggerated but I know it reflects the passion that people feel about such an important area of social policy to which we all have a long-standing commitment. I was grateful for some of the wise words of the noble Lord, Lord Best. I shall come to them. All the contributions have been illuminating in different ways. I may not be able to answer some of the technical issues on housing finance. The example of Pendle was interesting although I drew different conclusions from those offered by the noble Lord. I shall write to noble Lords if I am unable to answer all the questions.
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This is an opportunity for me to restate some fundamental principles. Choice and affordability of housing are essential. We have a national policy for housing but ultimately housing is a personal choice. Our duty must be to provide the widest possible range of choices. Because it is "right to buy", it is not wrong to rent. We must never forget that we have a duty to meet the fact that not everyone who wants to own a home can afford it. We have a duty to ensure that there is a stock of affordable housing to meet the needs of those who are disadvantaged—the young, disabled, those on low incomes, the impoverished, elderly and those who find themselves suddenly without a home.

We believe that there is a place for publicly financed housing where the market does not deliver because that secures so many other benefits, not least health. We know that over the past century housing has been the largest contributor to improved public health. For all those reasons, a government would be seriously derelict in their duty if they denied that they had a duty to provide social housing on the scale and in the ways needed.

We are investing more in housing and social housing than ever before. I agree with those who said that one of the challenges is to make housing policy as important, visible and sexy as all the other aspects of social housing to which the Government are committed. Indeed, they are. That is what my department is doing. Our commitment to housing is demonstrated by the fact that we have tripled total capital investment from £1.9 billion in 1997–98 to £5.5 billion in 2007–08, with £3.9 billion going into new social housing. Many noble Lords set out in graphic language what they think are the challenges, but we have focused on three sets of solutions because they are the most effective and they are what we needed to do. The first of them has been to tackle and prevent shortages of homes by maintaining and sustaining the stock which we inherited in 1997—the cost/benefits of quality—and providing decent and better homes, and, in doing so, opening up new possibilities for whole communities in ways which I shall describe. Secondly, we have increased the supply of social housing in many parts of the country. I hope that I can put an end to the idea that we do not recognise the importance of new build in its many forms. We have offered greater choice and mobility. We have put all that, as did the noble Baroness, Lady Hanham, in the context of the great challenge of meeting demographic pressures on housing and doing something about the increasing gap between earnings and affordability of housing, as we are trying to do through our response to the Barker report.

The first challenge was to get the best out of our existing housing stock. When we came into office, we were faced with a bill of £19 billion for the backlog of repairs. Two million social homes did not meet the basic standards of decency. That challenge required us to change the landscape and invent some new ways of doing things. We did it for a very good reason and it has delivered results. Since 1997, councils and registered social landlords have been able to invest more than £21 billion in their stock and there are
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1 million fewer non-decent homes. With the work done and the plans in place, we can go 90 per cent of the way towards meeting our decent homes target.

Far from being ashamed of that, I think that that is a record of which we should be absolutely proud. I would ask noble Lords—it is a parody of privatisation—what they would say to tenants who were left without bathrooms, kitchens, decent heating, a decent roof and paying high energy bills. Would they say, "Frankly, we would prefer you to be like that, rather than find some ways of raising additional money so that we can make a decent home for you"? We are now focusing our efforts on dealing with the last 10 per cent of non-decent social homes. We will come back to the House in the coming months with an announcement about the way forward for the decent homes programme.

In some ways, I do not recognise the noble Baroness's gloomy assessment of how tenants respond. By way of the decent homes programme, we are able to anticipate ways of dealing with some of the most deprived and depressed areas of the country because we can ensure that the programme brings with it better access to a social mix and diversity of housing types. We are in the middle of a series of demonstration projects in areas such as Manchester, Leeds and east London which bring together housing and renewal strategies with a mix of tenures that will create a much more vibrant, mixed community. By dealing with housing as a social opportunity, we will tackle the issues and challenges of worklessness and crime.

We have made that progress because we have been able to raise the resources. We have levered in an extra £6.7 billion through the arrangements we have made. The reason for our decision was not to undermine or bribe local authorities or to manipulate tenants and put them in a weaker position by reducing their rights, but to make sure that we could raise more money, modernise more homes and make their lives better.

I recognise that some people have argued, and continue to argue, that we should make the same resources available to local authorities as are available to us through stock transfer. Along with the other suggestions that have been made about how we could change the way we finance council housing, the problem is the impact on public expenditure. Public borrowing is limited; we cannot take risks with the economy. As the noble Baroness, Lady Hanham, was saying, since 2003 we have seen terrific progress. Since 2003 virtually all local authorities have decided how they can best deliver decent homes: 185 have transferred or decided to transfer; 59 have decided to set up an ALMO; nine have decided to take a mixed approach; 98 have said they will retain the management. Only three authorities have yet to submit an options appraisal, and we are in close dialogue with them.

Turning from that to our other big challenge—to build new homes—we have had significant success in the reduction of the most acute forms of homelessness: a 75 per cent reduction in rough sleeping, the end of
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bed and breakfast accommodation for homeless families, and the number of households living in temporary accommodation has remained stable since September 2004. I agree with the noble Lord, Lord Oakeshott, that there is a lot to do, but we have got some way towards removing the worst abuses. The noble Lord was right when he referred to Barker. Barker set us a challenge to build more affordable homes and we have made a start. We started with the Comprehensive Spending Review of 2004. We are committed to providing 75,000 new social homes for rent in the next three years to 2007. That incorporates a 50 per cent increase. We will do that because the RSLs themselves are more efficient. We will do more, which is why in the next spending review we are committed to setting out more ambitious plans. We have to wait for those, but I assure noble Lords that the commitment is there.

In this context, we strongly believe—I say this to my noble friend—that local authorities have a critical and strategic role to play in planning housing investment. They must meet need and aspiration. Housing authorities which are simply there for the homeless cannot plan for everyone. They have to meet their responsibilities across the housing sector. David Miliband has made that quite clear. They also continue to be important; the owners and managers of homes in a mixed economy and mixed, sustainable community.

Alongside that, in the interim—again in response to Barker—we are looking at a range of innovations as to how we can encourage the supply of social housing in the short and medium term, not least through the modification of private finance housing schemes. For example, a move towards demolitions means we can use extra space to provide additional units. We are looking at the possibility of allowing councils with ALMOs to build homes which the ALMOs will own and manage; for example, in Hounslow. In addition, we are looking at innovative ways in which excellent councils with good housing services can build new homes for rent. We are looking at ways in which housing benefit subsidies can be used to finance borrowing to purchase temporary accommodation and social housing. There is a whole raft of things to consult on. I hope that noble Lords will come forward with their ideas because that is extremely important. I am grateful in this context for the debate we had across the Chamber about how tenants responded to transfer. The evidence provided by the noble Lord, Lord Best, was compelling. I hope that noble Lords took note of that.

In terms of the rural areas to which my noble friend referred, we are aware, which is why we set up the Affordable Rural Housing Commission, of the challenge of providing a balance of housing in rural areas to keep the rural economy alive and to meet local needs for affordability. Again, when we talk of expanding choice, we are looking at a whole range of new initiatives such as the choice-based letting schemes so that we can develop the choice and power
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of tenants, and not only in the council sector. We are obviously concerned about tenants in the RSL sector as well. We take that seriously.

To conclude, going back to the point made by the noble Lord, Lord Bradshaw, and picked up by the noble Baroness, Lady Hanham, our task is not simply to provide social housing. We must grow the communities of the future. Yes, we will avoid the mistakes of the past and we will build sustainably. We will not build homes, we will build communities. That means building public realm, and taking that public realm as trust, which means that we have the highest quality design. High densities do not always make for poor design; think of the Italian piazza, for example. But that is our duty and that is the challenge, which is why we are putting such an emphasis on design and competence in that way. That is the context in which we approach not only the Barker agenda but the responsibility on us to ensure that social housing has the right place, and that we have a choice that is a balance between renting and buying but which at its heart has the needs of the family as our guiding requirement to provide what we can in the best possible way, using our resources in the most efficient way possible. I am very grateful to noble Lords who have spoken in the debate.

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