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Lilian Greenwood (Nottingham South) (Lab)
I am grateful for the opportunity to have this debate. I want to speak on behalf of the Meadows community in my constituency, and to explain to the Minister the real dismay that many local people feel about the news that the housing private finance initiative scheme to transform their neighbourhood will not now go ahead.
The Meadows has enormous potential. It lies just south of the city centre and is close to the railway station, which is undergoing a major redevelopment as part of the Nottingham hub. Two new tramlines that have just been given the green light will pass through the Meadows. The area is bordered by main roads linking it to the city’s ring road and key routes in and out of the city, so it has excellent transport links.
The Meadows sits on a bend in the River Trent. The Victoria embankment is a beautiful green space alongside the river, with an avenue of mature trees, the city’s war memorial, formal gardens, bandstands, sports pitches and a children’s play area. The Meadows has three excellent primary schools, a well-used library and a wealth of active community organisations, including the Arkwright Meadows community gardens, three tenants and residents groups, and the Meadows Partnership Trust, which provides advice and support on a wide range of issues, including training and employment opportunities.
The Meadows also suffers from serious deprivation, a poor reputation, crime and the fear of crime, and high unemployment. That is not to talk the area down—as I said, the Meadows has much to be proud of—but serious problems need to be tackled. According to the Office for National Statistics, all four of the super output areas that cover the New Meadows area are in the 20% most deprived nationally, and two are in the 10% most deprived. There are particularly high levels of deprivation in relation to crime, with higher than average levels of drug-related crime, and in relation to health, with just over a fifth of the population facing limiting long-term illness or disability, and with high levels of chronic heart disease. Many residents have no qualifications and low skills, and therefore have a reduced readiness for paid work and higher than average unemployment.
The Meadows is home to a diverse population of around 9,000 people living in 4,500 households. Housing in the Old Meadows is predominantly Victorian or Edwardian terraces. Although primarily owner-occupied, there are many privately-rented properties, including houses in multiple occupation, and considerable levels of disrepair.
The New Meadows has predominantly social housing, with most of the properties built in a Radburn-style layout, following slum clearance in the 1970s. That layout causes particular problems. Gardens back onto public spaces, making them vulnerable to burglary; there are many enclosed spaces, such as alleyways and tunnels, that feel unsafe; and the separation of pedestrians and car users makes it difficult for people to find their way around. Particularly unsuitable and unpopular are the Q blocks—two and three-bedroom family-sized properties accessed via stairwells and walkways. They are vulnerable to antisocial behaviour, which leaves residents worried about crime and personal security. They certainly are not places where one would choose to bring up one’s family.
There is an over-supply of flats and maisonettes. Many of the sheltered schemes are unsuitable, as they have small, first-floor flats with narrow staircases that mean that it is impossible to make them accessible. Overall, there is a need for significant investment to bring these homes up to decent standards and to ensure that they are secure, warm and modern.
More than three years ago, the city council’s regeneration team began working with local people and community groups to devise a neighbourhood plan to identify the problems facing the Meadows and come up with a shared vision of what was needed. More than 30 community events took place, and about 500 people participated in the process, including children, young people and local businesses. The neighbourhood plan provided a framework to make the Meadows a more sustainable community, with better access, greater housing choice and improved community assets; it would be more of a low-carbon neighbourhood, with less worklessness, lower crime, and reduced antisocial behaviour.
The housing PFI proposals were a vital part of the shared vision that emerged, and 90% of residents supported the remodelling proposals. As a result, the Labour Government gave the proposals a PFI credit of up to £200 million, subject to a satisfactory outline business case. The PFI housing contract would have transformed the area by demolishing unsuitable and unpopular properties; building new council homes—predominantly two to five-bedroom houses—to meet existing and future need; building 100 ExtraCare properties for elderly tenants; remodelling many properties to improve the layout and living environment; turning properties around to face the street; converting some flats to houses; removing enclosed spaces and alleyways; and improving and refurbishing existing council homes to meet modern standards.
A complementary development agreement for non-PFI housing would have delivered new homes for outright sale, and new homes for shared ownership that would have provided a foothold on the property ladder for people with limited financial means. Alongside those plans to improve the housing stock, the city council was securing a separate development agreement to create a new district centre to provide new commercial, retail and community facilities. That would have supported the area’s needs, and increased the attractiveness of the Meadows to potential residents and developers.
Together, those changes would have transformed the estate. Better housing would have meant that families would choose to live and work in the Meadows and be able to move to a larger or smaller home, with a choice of renting or buying as their needs and circumstances changed. That would have helped to create a more sustainable and balanced community, and residents would have had a real long-term interest in its future. The ExtraCare scheme would have offered high-quality sheltered accommodation for elderly people, with homes for life for local residents. It would have contributed to reducing health inequalities, and it would have created new employment in the area, including positions for carers.
The improved layout of the estate, with “Secured by Design” housing, would have made the Meadows more welcoming for visitors and residents, made the area feel safer and reduced the opportunities for crime and antisocial behaviour. It would have encouraged more people from across the city to visit the Victoria embankment and the green-flag Queen’s Walk park for leisure activities, further enhancing the Meadows’ reputation.
The new housing would have been designed and built to high environmental standards, helping the area to move nearer its aim of becoming a low-carbon community, using alternative energy sources and tackling fuel poverty. Of course, many new training and job opportunities would have been created in the heart of the community, particularly in construction and retail.
The Government's decision to remove funding for the Meadows PFI project means that a unique opportunity to transform the area will have been lost. That short-sighted decision will place a heavy burden on other publicly funded bodies, which will have to pay the price of poor educational attainment, high unemployment, benefit dependency, crime, antisocial behaviour, poor housing and fuel poverty.
Unfortunately, things will not just stand still; they could get worse. The 1,300 social homes that would have been refurbished under the PFI scheme now need funding from the already overstretched decent homes budget. An extra £10 million will be required to bring those properties up to standard. It is no wonder that Meadows residents are dismayed. While people in other parts of the city were getting their new doors and windows, boilers and insulation, kitchens and bathrooms, Meadows residents waited patiently for the opportunity to have something even better. They now know that even a secure, warm home may be out of reach.
What other options are open to residents of the Meadows to tackle these problems? The so-called big society offers no answers. The Meadows already has a thriving network of volunteers and community activists, but every voluntary sector group knows that its funding is under threat from the budget cuts.
The local neighbourhood policing team is working hard to tackle crime and antisocial behaviour, and crime in the city has reduced significantly in recent years. However, funding cuts of 20% over the next four years will make it extremely hard to maintain that trend, and the potential reduction in the visible police presence in the area will leave residents feeling more fearful of crime. Meanwhile, Nottingham city council faces cuts of 28% over the same period, so its ability to explore alternatives, let alone provide the necessary financial support, will be severely restricted.
The Government claim that we are all in this together, but I cannot imagine Mrs Cameron or Mrs Clegg struggling with a buggy up three flights of stairs and along a walkway to get home with their shopping bags. I do not suppose that they have to worry about walking down dark alleyways and through tunnels on their way home at night. I do not imagine that they have to worry that their windows do not fit properly, that their flat is cold and damp and that their kitchen is falling to pieces. I ask the Minister to think again. This opportunity to transform the Meadows through a 25-year investment is good value for money; not only is it socially just, but it makes real economic sense. We are talking about not just numbers on a balance sheet but people’s homes and life chances; such things are too important to throw away.
If the Minister will not review the decision, will he tell us how we can ensure that every home is brought up to a decent standard when the decent homes budget is being cut nationally by £900 million? How can we make the Meadows safer when police numbers are being cut and we are in danger of losing our local police station? How is it fair that an area such as the Meadows faces deeper cuts than much less deprived council areas that never received additional budgets through area-based grants? Furthermore, how can this Government, which claim to be the greenest ever, support the Meadows in becoming a low-carbon community, free from fuel poverty, when we are burdened with cold, damp and hard-to-insulate properties?
If the Minister tells me that there is no money left, I will tell him what people in the Meadows always ask me. They say, “How can there be no money when the banks that we own are still paying out massive bonuses?” If it is true that there is no money, how can it be that there is funding for new free schools, and that £2 billion is found for a reorganisation of the health service that nobody voted for? Rather than undertaking a survey that costs millions of pounds about how happy people feel, why do the Government not do something practical to make lives better?
If the Minister is not convinced by what he has heard this afternoon and will not rethink this cruel cut, I urge him to meet me, the regeneration team and all the local people who worked so hard to devise the neighbourhood plan to help us find new ways in which to meet the hopes and aspirations of an area that deserves so much better.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
As ever, it is a pleasure to see you in the chair, Mr Gale. I am grateful to the hon. Member for Nottingham South (Lilian Greenwood) for raising these matters and I congratulate her on securing the debate. She raises a number of understandable concerns, which reflect, I suspect, the inevitable difficulties that result from our predecessors breaking the bank. Unfortunately, the consequence is that the current Government have to pick up the tab, and that involves some very tough decisions; I do not pretend otherwise.
I take on board the specific points that the hon. Lady has made in relation to particular concerns of her constituents and the situation in Nottingham. I know from personal experience in my constituency of Bromley and Chislehurst of the importance of a well-funded and well-managed social housing sector. I understand why the hon. Lady is disappointed that funding for the Meadows estate private finance initiative scheme will not now be available; I do not complain at all that she has raised it as a concern. However, I make no apology for repeating what Ministers have consistently said to the House. Since coming to office, our most urgent priority has been to tackle this country’s record deficit. Our clear message is that we need to restore confidence in our economy and support the recovery. Failure to do so will prejudice investment in housing of all kinds in the longer term.
We are living in difficult times and we need to take difficult decisions about how we reduce our national debt; I am afraid that that cannot be shrugged off. We need to be honest with people about the hard choices that we face. We must live within our means and deliver value for money for the taxpayer in all our investments. Simply put, my Department does not have the resources available to fund every private finance initiative scheme. It was quite clear when the previous Government were in office that there would have to be considerable cuts; the previous Chancellor indicated that there would have to be cuts. Cuts in regeneration funding worth some £300 million were announced before the general election. There was no guarantee that any scheme would continue whichever party came to power.
Given that we were not able to support every PFI scheme, my right hon. Friend the Minister for Housing and Local Government and fellow Ministers concluded that our priority had to be to support projects that were in procurement. Those projects were more advanced; some had got to the contractual stage and others had undergone considerable preparation work. That means that we cannot support projects which, although undoubtedly worthwhile, are only in the pipeline and have not progressed to the procurement phase. Such projects include the Meadows in Nottingham. Councils, including Nottingham, were notified that funding would not be available on 22 November.
None the less, it would not be right to assume that that means there is no commitment on the part of the Government to fund housing, including social housing, and improvements in housing. That may not help in the hon. Lady’s case, but it is important to set this decision in a broader context. Over the same period of the spending round, my Department will make available £721 million for PFI projects that were in contract. We are making available a further £372 million for other projects that were more advanced in the procurement stage. Therefore, it is the procurement and the contract that have the priority. That demonstrates very clearly that we are by no means washing our hands of this issue. We have a clear commitment to continue funding social housing and decent homes, but when the money runs out and one inherits an empty set of coffers, a line has to be drawn somewhere. As well as funding housing PFI, we will assist fire PFIs if they are in contract and procurement as well.
I know that that is a disappointment for Nottingham. It is a thriving city—I have visited it in the past, but not since the general election—but like any city, it faces challenges. However, I am confident that Nottingham and its social housing sector can weather the current financial storm and build a sustainable and prosperous future. Let me highlight a good example of an organisation in the city that has turned its fortunes around. Nottingham City Homes is the arm’s length management organisation that manages the council housing stock on behalf of the city council. A couple of years ago, it faced some real challenges, but it is now delivering a successful decent homes investment programme. That large capital programme has already invested £74 million to upgrade the housing stock in the city, which is helping to make homes safer, more secure and more fuel efficient. The sadness is that our economic inheritance constrains our ability to help everyone in the same way.
Lilian Greenwood
Recognising that Nottingham City Homes works incredibly hard to achieve its two-star rating, and so has been able to access central Government funding for decent homes money, is it fair that it should now be told that it has to rebid for that money and that it may not get the full funding that is required to bring all Nottingham homes up to standard? How can that be reasonable and fair, and how can Nottingham City Homes respond to that when it will be short by a significant measure of the funds that it needs to carry on with work that it has already set in train?
Robert Neill
Because fairness requires that we have to recognise that we must cut our cloth according to the cloth that is now available to us. Unfortunately, because of the economic policies that were pursued previously, there is less money available, so we must say to organisations, including good organisations—and Nottingham City Homes is not unique in that regard—that they have to rebid. That is at least keeping a door open, given the limited pot that we have available.
In relation to PFI projects that we cannot fund, such as the Meadows, it is worth saying that the Homes and Communities Agency is in discussion with all the authorities in that situation to see if there are some parts of those projects—not the whole, but some parts—that it might be possible to advance through some other means. I cannot hold out promises; I would not seek to do so. However, those discussions are taking place and I am sure that the hon. Lady and her city council will be in touch with the HCA swiftly about that matter, if they are not already in touch with it; I suspect that they already are.
Work is therefore being done and there is investment going in. The ALMO in Nottingham—Nottingham City Homes—is engaged with wider agendas, to which the hon. Lady fairly referred, such as community empowerment and tenant engagement. It is also working with partners to tackle joblessness and welfare dependency. We are committed, too, to continuing funding for the decent homes programme. The coalition Government are committed to reducing the £3.2 billion capital investment backlog in council housing that we inherited from the previous Administration. This year alone, we are investing about £1 billion in decent homes funding to improve the social housing stock, despite the difficult financial envelope that we have to live with. I think that, again, that clearly demonstrates our continued commitment to invest in communities and support neighbourhoods, including those inhabited by some of the most vulnerable people.
In the spending round, we fought hard to secure a good settlement for the decent homes programme. At the time, there were people who said that the Government might abandon the programme altogether, but that has proved not to be the case, thanks to the work of my right hon. Friend the Minister for Housing and Local Government, and his colleagues. In fact, we have secured more than £2 billion of capital funding during the next four years, which is sufficient to halve the remaining capital investment backlog. That means that about £1.6 billion will be available for local authority housing, which could deliver more than 150,000 refurbished council homes by 2014-15.
Furthermore, we have not stood still on the allocation of future decent homes funding. On 11 November, together with the HCA, we published proposals for allocating funding, on which local authorities will be consulted. In future, decent homes funding will be available for all local authorities, including Nottingham city council, that have a significant investment backlog. We expect bids for funding shortly from such authorities, and I am sure that Nottingham city council will be among them. We are also moving to tackle some issues underlying the way in which our council housing finance system is organised, because it has been recognised for too long that it is unduly complex and overcomplicated. We are therefore using the localism Bill, which we hope to introduce in the House very shortly—I think that that is the appropriate phrase—as a vehicle to provide much-needed reform of social and council housing finance.
Under the proposed arrangements, which I hope will gain broad cross-party support, councils would keep their rental incomes under a much fairer and decentralised system. That is relevant to Nottingham, as the reforms will provide new opportunities and incentives for all councils to plan for the longer term, and to put in place effective asset management strategies. Nottingham, like many of our substantial cities, has considerable assets that fall within that category.
We have also indicated that we intend to press ahead with tenure reform. On 22 November, we published a paper that set out our intention to reform the way in which social housing is used, because we have to look at getting the best use out of the existing social housing stock. I think that the case for reform in that sector is strong and it is one that I have heard articulated by Members from all parts of the House, because it is an issue that is often raised in their constituency surgeries. It is not right that some people—I am sure that there are some in Nottingham—spend years on housing lists but never seem to get anywhere near an allocation. Ensuring that there is enough housing for those in real need is an important part of the housing mix too.
We also want to look at creating more flexible tenancies, which has been referred to by my right hon. Friend the Minister for Housing and Local Government. We are looking at flexible tenancies for a minimum of two years, but I emphasise that we will protect existing tenants, such as those on the Meadows estate; they will not see their situation change. This issue is about tenancies for the future, which may be appropriate for some of the new build that I hope in due course it will be possible to bring forward.
Finally, it is worth remembering that the new homes bonus will apply to social housing as much as to private housing. That bonus is a powerful, simple, transparent and permanent incentive for local authorities and communities to increase their aspirations for housing growth. At the moment, there is not much of an incentive for local authorities to welcome the creation of new homes. Beginning in April 2011, the new homes bonus will match-fund the additional council tax raised for new homes and properties that are brought back into use with an additional amount for affordable housing, so there is positive additional support for social affordable housing for the following six years. My Department has set aside nearly £1 billion during the comprehensive spending review period for that scheme, including nearly £200 million in the first year. We have made it clear that funding beyond those levels will be continued via the formula grant. That should mean that, by the sixth year of the scheme, about £1.2 billion will be made available as an incentive for councils that wish to build homes.
Against that background, despite the disappointment that I am sure the hon. Lady and her constituents feel, along with others who are in a similar position, I think that it is fair to say that the coalition Government have demonstrated a commitment to social housing. We want to see a flourishing social housing sector; we want to encourage talent working in that sector, and we want to encourage tenants and occupiers of social housing to become much more proactively involved in the management and improvement of their estates and homes. That is why we are decentralising power directly to local authorities such as Nottingham, so that they can decide how best to deliver their services. As I have said, against that background I am sure that councils such as Nottingham, which had PFI schemes in the pipeline, are already considering other options about how to deliver the outcomes that the PFI funding would have supported. As I have also said, the HCA will liaise with them and advise them on that issue.
We are determined to ensure that social housing continues to be relevant and available in a changing world. The underpinning rationale of the Government’s approach is clear and consistent: future investment is very tightly focused; it must deliver value for money; and we seek to provide access and provision to those in greatest need. Of course, we must do all of that in the context of our economic inheritance.
Although I accept that the hon. Lady will not be happy about the outcome in the case of her constituency, I have been honest with her about the position, and the Government’s overall commitment to social housing remains very firm despite the awkwardness of the economic inheritance that we have to live with.