Housing

Baroness Hanham Excerpts

Thursday 6th June 2013 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the contributions to housing debates in this House always come from experienced people. It has been an extremely wide-ranging debate and I thank the noble Lord, Lord Dubs, for having introduced it because it is good for us, every so often, to be able to rehearse the issues. I do not think there is any disagreement between us that we need more houses and more housebuilding. We are all in accord with that. It would also be fair to say that it is recognised that this did not start in 2010 and that this is a long, historical problem. It may even go back as far as Harold Macmillan and his 300,000 houses following the war. We have never seriously caught up in all that time. We are not going to reverse history within a decade but there is a general expectation and understanding that we need to make solid progress where we can.

I recognise at once that housing is inextricably linked to the wider health of the country. We know that it is linked to the economy and the financial markets, and leads to confidence in the economy and the confidence of housebuilders. There is a huge pot here of things that need to be done to get the bricks built on the ground. This Government are committed to seeing a major increase in the supply of new homes where they are needed and wanted. We all recognise that this is a local problem in many respects. Local authorities know where they need housing and have in their hands—through their housing strategies, their local development plans and the arrangements they come to with developers on what affordable housing is provided under Section 106 requirements—a certain amount of power.

We need also to provide the confidence that housebuilders need, which is very gradually coming to fruition. We are beginning to see that housebuilders are more confident about moving forward. I accept that the economy has held some of this back but, once again, that did not start in 2010. I also recognise that the hopes and plans of young people, families and older households across the country are affected by all of this. Our aim is also to help people achieve their aspiration to live in a home that gives them security to plan for their future. I agree with the noble Lord, Lord Griffiths, that there is a particular problem in London. We are all seeing investment in very expensive properties that are not immediately available to other people. But I go back to my point about Section 106: where permission is given for these rather grand glass buildings, which are then sold off for horrific sums of money, within that there has to be a Section 106 agreement that recognises that affordable housing is required.

The Government are already committed to investing more than £11 billion in housing programmes during this spending review period. Concerns have been raised about a bubble being created by giving help to the private sector—if only. If there were a bubble of anything we would be quite grateful. We have to ensure that the movement is there and that housing continues to be provided in all sectors: social housing, affordable housing, the private rented sector and assistance with mortgages. The Government are doing all of that. One noble Lord said that we had made 300 announcements over the past three years. That ought to indicate that we are doing a very great deal to try to ensure that this sector is motivated and action is generated.

We believe that this action is starting to have an effect. As noble Lords have said, we have reformed the planning system to support the delivery of new housing. There are early signs of progress; for example, 20% more new homes were given the green light in 2012-13 compared to the previous year. We are all trading figures here. They may come from slightly different angles. I am going to give noble Lords mine and if they do not totally accord we can argue that out afterwards. Housebuilding starts in England were 15% higher in the March quarter of 2013 than in the same period of the previous year. As the noble Lord, Lord Palmer, said, in the first 18 months of this affordable homes programme, we have delivered almost 63,000 affordable homes of the 170,000 we expect to provide within the spending review period.

Our large sites programme is already being successful, with investments of £76.7 million of recoverable loans to accelerate developments, contributing to bringing forward up to 42,000 new homes, boosting the construction industry and stimulating local growth. Several noble Lords referred to the lack of land. I will just draw attention to something that I have spoken about in this House before, which is that public sector land is being released, pretty quickly now, to enable more than 100,000 new houses to be built on that land. Work is starting on large sites. I drew attention earlier today to Cranbrook in Devon but there are other examples across the country of larger-scale developments taking place. Some of those developments, particularly in Cranbrook, are already completed and people are moving in. So there is an expectation not only of small developments but large developments of much needed homes.

It may be a good moment to say to the noble Lord, Lord Palmer, that we had a Question on garden cities this morning. He may not have heard me say so but the principles of garden cities are being built in to these large new developments so that they do not all end up as amorphous and uninteresting new developments.

Mention has been made of the Help to Buy equity loan scheme launched in April. It has already boosted 1,500 reservations on new homes in the first month alone. That demonstrates that there is not only an appetite to go forward—the money is available—but there are now people making clear that they want to use it. No one has mentioned today the new homes bonus. More than £1.3 billion has already been allocated through the new homes bonus. That demonstrates that there are either houses built or empty homes brought back into use, because the money is not paid unless there is evidence of that. We know that more than 400,000 homes have been provided as a result of the new homes bonus and that 55,000 long-term empty homes have been brought back into use.

We have tried to help not only homes to own but the private rented sector. We appreciate that the private rented sector has a big role to play. We have the Build to Rent fund, announced last September, which was so oversubscribed that in Budget 2013 we were allocated a further £800 million on top of the original £200 million, so that we could support as many projects as possible.

We are committed to tackling the long-standing gap between housing supply and demand and addressing market failures where intervention is needed. It is important that we do not step in where the market can do it itself, but where it needs a nudge or help, we must find the policies to do that. We all have to recognise that this approach will require patience at times, but also a bit of ingenuity and an ability to move where necessary when we see that things need to be given a bit of a push.

Things are moving in the right direction. Housebuilding starts in the quarter to March were 4% higher than in the previous quarter, but there is a long way to go before we reach the levels of growth that we need. We recognise that. On affordable housing investment supply, there has been a £19.5 billion investment—that includes investment from the private sector and, as I said, 170,000 new homes will be built by March 2015. The noble Lord, Lord Tope, asked about the housing cap. We have had discussions on the housing cap before when he, his noble friend Lord Palmer and the noble Lord, Lord Shipley, have promoted the removal of the cap from local authorities to give them the head room to provide social housing. It is worth remembering that local authorities already have £2.8 billion head room within the cap, much of which they could use to help those housing needs. Many local authorities have land that they could use already.

The noble Lord, Lord Tope, referred to the expansion of the rented sector. We have provided funding to support that. We have also commissioned and received the report from Sir Adrian Montague identifying barriers to institutional investment in the private rented sector. That is being considered at present. As a result of that report, we set up the Build to Rent fund to stimulate building in the rental market.

The large sites programme, to which I have already referred, is beginning to demonstrate that lots of housing can be built on those sites and can be supported by both public and private finance. The empty homes policy and the decent homes policy have been successful. There is much evidence for that.

A number of noble Lords raised what they call the bedroom tax, and what I call the spare room subsidy. The noble Lords, Lord Tope and Lord Palmer, and the noble Baronesses, Lady Blackstone and Lady Turner, all referred to this. Public housing is not something where we can be cavalier about ensuring that it is properly used. The situation is that there are more than 1 million spare bedrooms in the social housing sector at present. Housing benefit for the social rented sector is being paid for accommodation regardless of its size, even when considered too large for a household’s need. This is really about the fairness of the use of social housing stock and fairness to people. It is not expected that they should be forced to move. We expect that some people may want to move. They may get a job or increase the hours that they are working, while some may, for example, take in a lodger. However, by and large we do not think that this will displace a huge number of people. As I say, additional affordable homes are being built.

However, there are exemptions and we ought to be clear about them. The additional room is allowed for foster carers and for an adult child in the Armed Forces who is living at home but on deployment. It does not apply to supported exempt accommodation. Children unable to share due to disability may also be allowed the extra room at the local authority’s discretion. In addition, as noble Lords have said, the discretionary housing payment is available to help support it.

In his introduction the noble Lord, Lord Dubs, talked about homelessness. This is where I worry that we trade figures as our estimate is that homelessness still remains low. Despite all the economic challenges we face, it is still less than half the level that it reached under the previous Administration. There are strong safety nets in place. There is the No Second Night Out project in Greater London, which is being extended, while all local authorities are required to ensure that they do not have homeless people for any length of time.

We have committed to tackling homelessness and rough sleeping. More than £400 million is being invested in homelessness prevention, which is extremely important. On top of that, we announced an additional £70 million to tackle and prevent homelessness in 2011-12. That includes the homelessness transition fund to support No Second Night Out, £20 million to help ensure that single homeless people get access to good housing advice, the preventing repossessions fund to enable local authorities to intervene early, £5 million to boost the homelessness change programme, and £5 million for the social impact fund. We do not expect temporary accommodation figures to go up very much. The bed-and-breakfast rate is a challenge but there should be no reason for any local authority to leave people in bed and breakfast, or indeed for having to use temporary out-of-area accommodation.

If I may, I will briefly go through some of the questions. I think I have covered some of the points that the noble Lord, Lord Dubs, raised in his excellent introduction. He said that the welfare benefit cap should take account of different rent levels in different parts of the country. Average earnings, by definition, determine the level of the cap. People receive benefit according to the cost of the property they are in. We think that there has to be a maximum level of support which benefits will pay. Indeed, it is good to note that in the past couple of days the party in opposition has at last been able to recognise that welfare payments have to be controlled in some way.

The noble Lord, Lord Dubs, also raised the issue of Oxford City Council. This is a matter between local authorities, but it is perfectly possible now for local authorities to have developments that go across boundaries. The Growth and Infrastructure Act enables developers to submit major planning applications and, as I say, they can straddle local boundaries if the will is there. It may be that there is a bit of a problem about the will, but there is nothing to stop them.

I hope that I have dealt with most of what the noble Lord, Lord Griffiths, said. I agree with quite a lot of it, including the concern about young people. That is at the bottom of what we are all worried about—the future and future generations. Even if we can manage, they are finding it very hard. That is why we are working hard with all these policies to try to ensure that we get over this terrible difficulty in the not too distant future.

The noble Lord, Lord Tope, asked about the planning review of the noble Lord, Lord Taylor. We accept the key recommendations in the main and our response to both the review and the subsequent consultation has just been published. The noble Lord, Lord Tope, highlighted the European Union and the prudential borrowing regime. We agree that that regime has proved an effective control on council borrowing, but that is really all I can say. Most particularly, the noble Lord, Lord Tope, referred to housing for older people. I know that a number of very influential reports have been issued recently. The National Planning Policy Framework requires local authorities to plan for a mix of housing based on demographic trends, and that includes people of different ages. The reports that have been issued recently are being taken into account. The Government have announced a housing care and support fund of up to £350 million to promote more specialist housing.

There were other matters that I do not think I can cover by name in my reply, although I hope I have covered them by topic. I am just about to go over time. Again, I thank noble Lords for this extremely interesting debate, and I hope that I have managed to convince them that the Government are fully aware of the problems and are investing large sums of money to try to bring about change to that situation, with our policies and our commitment to finance.