Decent Homes

Baroness Hoey Excerpts

Thursday 27th January 2011 Westminster Hall

[Mr Betts]

I thank my right hon. Friend for her remarks. Clearly, a number of issues are intertwined in that problem. Under the Labour Government’s policy, if an ALMO reached two stars or better, it would automatically have access to the funding necessary to bring its homes up to a decent standard. In the comprehensive spending review, the money available for decent homes was cut by about 50%. Authorities that have not completed their programmes are entitled to bid for funding, although if less than 10% of their homes are not decent at present, they are not likely to get any funding. If up to 20% of their homes are deemed not to be decent, they are likely to get only half the funding that they previously might have been entitled to.

As I understand it, as Lewisham Homes has not started its decent homes programme, it will still be entitled to bid for the total amount, but as the total is 50% less than it was, how much it will get is still open to question. Perhaps the Minister will be able to address that issue in his summing up.

To be fair to the Government—this is an interesting matter of debate— they have relaxed the rule that only two-star ALMOs can get funding. That means that the previous situation in which a tenant could be penalised and not have the work done on their home because their landlord was not performing properly will be removed. On the other hand, the requirement to have two stars as a basic to obtain the funding has driven up housing management standards as a whole, and therefore has achieved considerable success.

[Kate Hoey (Vauxhall) (Lab)]

I would not want hon. Members to think that all ALMOs have been wonderful successes. The ALMO in Lambeth, Lambeth Living, which narrowly got voted through by a tiny majority after the council spent £1 million on it, has been pretty much a disaster. The chief executive is leaving this weekend and the deputy left just before Christmas. The tenants in Lambeth are in a ridiculous situation. Their ALMO was going to get a two-star rating. That did not happen, and the tenants are now left with huge amounts of very bad housing with no one wanting to do anything about it. The ALMO, therefore, was not the answer; the answer would have been to put the money directly into the estates that really needed it. Lambeth has some desperately bad estates. They need the money and I am not sure that spending money just on ALMOs made any difference.

[Mr Betts]

The evidence suggests that it probably did, but successes in general do not mean successes in every particular case. Clearly, there are some bad examples, and my hon. Friend has highlighted one from her constituency. Tenants should be free to choose their landlord, taking into account their own circumstances. If they want to revert back to council management, I see no reason why they cannot do that. The Minister may say a bit more about the funding possibilities. My understanding is that Government are now prepared to put money directly into councils for the decent homes programme. To be even-handed and balanced, I would suggest that to say that there should be funding irrespective of who manages the houses is a helpful move. Where we would disagree is over the amount of funding; there probably is not enough of it. At least Lambeth tenants now have the option to move back, if that is what they want.

Some authorities have seen ALMOs as a method of getting in the money, making the homes decent and then having the properties transferred back to them. In the end, what matters is not what the landlord or councillors think but what the tenants think. The Government’s attitude so far is that when an authority wants to bring back the management in-house, it should go through the same process that tenants went through to create the ALMO in the first place. However, I would welcome something a bit stronger. The management of people’s homes is almost as important as the ownership, so we should have a ballot to ensure that the proper will of tenants is carried out into practice.

I have Sheffield Homes in my constituency, so I see a different perspective. It is the only ALMO in the country which has had three stars three times running. It has improved the management and maintenance, reduced the costs and got tenants involved. There are still challenges to be faced, such as moving on to a more co-operative style of development in future. Sheffield Homes has been successful; it can be built on for the future and not reversed away from. At the end of the day, however, it is a matter for the tenants. I would like to think that, if there were any possibility of the council changing the management arrangements or the ownership arrangements, it would ballot the tenants, so that it will be the tenants’ views that are taken into account; that is what matters at the end of the day.

I have mentioned the reductions in capital funding as a result of the CSR. Work worth some £3.5 billion is still to be done to bring all social housing up to a decent standard, and there will be about £1.6 billion in the programme for the next four years.

In other words, we are probably talking about 10 years before all homes are brought up to a decent standard. The Minister will, of course, say that councils can use their own resources, and indeed Sheffield Homes and Sheffield city council are planning to do just that. The real problem, however, is that if Sheffield Homes and Sheffield city council use all the funding they currently have to bring the remaining homes up to a decent standard by 2013-14, without additional Government funding they will still be about 7% of homes short, though by and large those will be properties on which people have not wanted the work done and others that have become non-decent since 2010 because of their age. With every bit of Sheffield city council and Sheffield Homes’ capital expenditure being used for that, there will be an end to all heating replacement programmes in other properties that are crying out to have their heating replaced for energy efficiency and other reasons. Therefore, even when other money can be found, it will be at the expense of other important programmes. This is a three-star ALMO that has managed its money very well indeed.

On the decent homes standard, there has been a challenge and, as the report clearly spells out, there is also a challenge for the future. There is no point in bodies getting up to the standard if they then fall away from it. Another thing that we identified was the reform of the housing revenue account. I welcome, in principle, the Government’s proposals to reform that account, to give a say and control back to local authorities. The reform will give some certainty for the future, and is based, with one or two changes, on the proposals that the previous Minister for Housing, my right hon. Friend the Member for Wentworth and Dearne (John Healey), introduced under the Labour Government. One of those changes is that councils will now not be allowed to keep 100% of their right-to-buy receipts. There will also be extra borrowing controls, which are slightly worrying in that they will constrain councils’ ability to expand their resources to maintain homes to a decent standard. On the other hand, the removal of the need for rents to converge might provide a bit more flexibility in rent increases. I am not talking about the rents necessarily increasing to 80% of market rents, but councils that have put in a new heating system or insulation measures that reduce tenants’ heating bills, could put a bit extra on the rent. The tenants would contribute to the cost, but would probably pay less overall under the joint arrangement between landlord and tenant. That bit of flexibility might be welcome.

We have taken expert advice, which has indicated that under the Labour Government’s proposals the major repairs allowance in the housing revenue account was due to rise by about 25%. We understand that this Government also propose that, but we have not yet seen the precise figures. To maintain homes at a decent standard, and in particular to keep repairs up to a proper standard and replace the sanitary and kitchen fittings that were included under the decent homes programme but would have worn out, the figures show that a 40% to 60% increase in the major repairs allowance is needed, not the 25% proposed. It is worrying that there is an inbuilt disrepair element in both the previous Government’s proposal and that of this Government, and that sufficient funding might not be available to maintain the standards. Any future Government will have to address that challenge.

Other Members want to speak, so I shall conclude with some remarks on the private sector. The private sector was added to the decent homes programme as an afterthought, and it is often forgotten that it exists at all. It was not there at the beginning, in 2001, and adding it in has not been a great success. One fundamental problem was that the new fitness standards in the private sector, which came in in the middle of the programme, immediately added about 10% of private sector homes to the number of non-decent homes. The analysis showed that 3 million private homes with vulnerable households were non-decent when the programme began: 40% were homes with private tenants, and 65% were homes with owner-occupiers who were considered vulnerable because of the benefits they received. Those numbers are staggering. There was no general requirement to get all those homes up to a decent standard—only to do something to improve the numbers. While there probably has been some improvement in numbers, there has not been the same drive and the same co-ordinated programme as there has been with social housing tenants. Other problems come from many owner-occupiers of these homes not being able to afford the necessary repairs. They are potentially asset rich but income poor, and that is a real challenge for them.

--- Later in debate ---

[Heidi Alexander]

I do appreciate the hon. Lady’s well-made point. The ability of organisations to deliver complex capital projects is an issue. Although the assessment process for two stars may not be perfect and although the hon. Lady’s ALMO may be completely capable of delivering such a programme, we have to be careful about where money goes. I appreciate that times are difficult for her tenants and that she would like to see investment in their homes as much as I would like to see it in those of my constituents.

[Kate Hoey]

On the question of cost and complex projects, one of the things that residents on many of our estates continually comment upon when they see the capital projects is the number of hugely expensive consultants that seem to be employed on ridiculous salaries. On the cost of doing some of these quite small projects on small estates, does my hon. Friend think that the new coalition Government should look at new ways of getting the money to get the windows on an estate done in a way that does not involve these grotesque salaries that seem to go to everyone?

[Heidi Alexander]

I completely share my hon. Friend’s concerns about that and I press the Government to look at new ways of making sure that public money is used in the best way possible. My experience on Lewisham council—indeed, I was also a member of the Lewisham Homes board for a year—showed me that the right skills need to be in place to make sure that programmes are delivered effectively and efficiently. I am not saying that things cannot change in that respect and that money cannot be saved, but clearly people need to have the right clienting skills to get the most out of the contract.

--- Later in debate ---

[Kate Hoey (Vauxhall) (Lab)]

It is a pleasure to follow the hon. Member for Loughborough (Nicky Morgan). This debate has demonstrated how much every speaker cares about housing in their own area and on how much we agree, although we will always disagree about how much money is spent by whichever Government are in power. Many Labour Members were cross during the first four years of the Labour Government, way back in 1997, when we felt that housing was being given the least priority. That changed, but if we had given housing a great deal more priority from day one, we would be in a much better position today.

I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts), who introduced this debate, on his commitment to housing over a long period. He has always ensured that the matter is raised in Parliament. I say to the Minister that his job is probably one of the most difficult in the Government, because housing affects every MP from the inner city to rural areas, as my hon. Friend the Member for Islington North (Jeremy Corbyn) has said. It is the most important issue that I encounter at my constituency surgeries. For many of us, it is there all the time, and we get more and more frustrated and depressed, because we know that we can do little to help people who are desperately overcrowded and want to move or who are homeless.

On cost, there is no point arguing about how another Government would have spent more or done things differently. Undoubtedly, cuts would have had to come. We all want to support the Minister in arguing his case with the Treasury in terms of the cost-benefit analysis of spending and investment in housing. My hon. Friend the Member for Islington North has discussed the cost of people living in bad housing. The cost to our national health service of the people affected by bad housing conditions and overcrowding is huge, as it is more likely that they will need treatment, which costs money. Although we have our differences in terms of specific party politics, we must do everything that we can collectively to say to Governments of all parties that investment in housing saves money in the long term.

I will make one or two quick points. The reason why I did not put in my name, Mr Bone, is that I was not sure how long the introduction to a new report on a ban on Heathrow night flights would take. It did not take as long as I thought it would, so I am able to be here.

Many of the Adjournment debates that I have secured concerned housing in Lambeth. Lambeth is one of those boroughs in which politics change, council leadership changes and coalitions form—we have had it all during my time as a Member of Parliament—but one thing that does not seem to change is the culture and how it is run, particularly in terms of housing. I opposed the ALMO in Lambeth, as I thought that it would end up simply as a change of function from the local authority, and that the same kind of people would run the ALMO. I have been proved more or less right. The ALMO was approved by a tiny majority—3,518 to 3,362—so I appreciate that it did not start with a mountain of support. Some good people have been involved, and some have worked hard.

I add my thanks to the people at the bottom of the structure—those who do the cleaning on the estates, particularly those who are in-house. Despite all the changes at the top, in which they never seem to be involved, and despite all the factors against them, they try to deliver good services, where they can. They are at the sharp end where the cuts will come, which will not affect the people on £250,000 a year—the directors and assistant directors of when we seem to have so many, who get huge amounts of money that never seems to be cut. I would love the Select Committee to investigate the costs of how we deliver services. Any tenant or resident leader who has been involved in their tenants or residents association for a long time could simply come in and say how much things could be changed and made different.

We did not get a two-star rating in my constituency. When the ALMO was set up, most people moved to it. We got a few changes, but we are no nearer to getting a two-star rating now than we were when we started. The tenants and I have always said, “What happens when there is a change of Government? Is there a plan B? Will ALMOs still be supported? Will a two-star rating mean anything?” I am quite pleased that we have got rid of this whole two-star thing, because in the end, it is not the tenants’ fault that the ALMO does not have a two-star rating. The tenants worked so hard to make it happen. Now we are in a situation in which we do not have a two-star rating, and we have a huge number of homes that are not up to the decent homes standard. We have put in a bid for £217 million, but we are unlikely to get it, and we should be coming to the Minister now with our priorities.

One or two estates are real priorities. I could take hon. Members to an estate, which is a 10-minute walk from the House of Commons, where the windows are falling out, which is something that people have been living with for a long time. I cannot understand why we do not have a system where we look at the estate and assess how much it would cost to get the windows in. We will spend more money—just like we spent more than £1 million on getting an ALMO—on preparing the costs and the analyses, and companies will come back time after time. It is usually the same old companies that get the jobs anyway. All those people go around tendering against one another and operating cosy little cartels. It often ends up with someone getting a lot of money, and sometimes the standard of the work is not adequate.

Decent homes standards cover more than just the home itself. Some of my older residents do not want a new kitchen and like their sinks or whatever. In fact, some of the sinks that were taken out were sold to rich people who wanted to install an old-fashioned sink. A decent homes standard is different for everybody.

It upsets me that we have many empty flats and homes in Lambeth. When a tenant moves out or dies, their home is empty. Suddenly, that home cannot be let, because it is not up to decent homes standards, even though someone was living there two or three weeks ago, which is absolutely ridiculous. We should be able to allow people with a bit of nous who are on the housing waiting list to go in and do their work, like the old Greater London Council used to do. As long as the electrics and the health and safety are right, I do not see why anyone should not be allowed to go in and take the flat. Instead, we have flats sitting empty for months and even years. Then the council says, “We had better sell them off now because we cannot afford to make them good.” It is absolutely scandalous, and I hope that the Minister will say that he will encourage such a route.

[Mr Betts]

Where councils let a property which is not decent and the tenant moves in, there is a guarantee that once they have been in for a short period of time, it will be brought up to a decent standard, which is a condition of the letting being accepted. In such a case, the money might be taken away and the council might not honour its promise, which would be a real problem for a tenant who had moved in under such circumstances.

[Kate Hoey]

I want to go further. If a person is handy and can do a bit of plumbing, why can we not let them move in and fix things up themselves? For the first six months, they could live rent-free or pay a reduced rent, which is what the GLC used to do. If the flats are used, more rent comes into the borough thereby giving councils more money. If we leave the homes empty, no one is paying rent. I feel strongly about that.

Finally, housing associations have become more and more like the old style, one-size-fits-all council, which we have tried to get away from. I was very supportive of the tenants who wanted Hyde Housing to take over a great deal of the housing stock in Stockwell, but we have recently experienced the most appalling problems with that organisation. When it finally realised that things were going wrong, representatives came down and were responsive to the tenants. The chief executive has now gone, which may be why things have changed.

[Jeremy Corbyn]

Does my hon. Friend not think that there is an issue surrounding the governance, accountability and democracy of housing associations? They started out as smallish local, social organisations, but they have become very large housing companies that often seem more interested in private development than in their primary function.

[Kate Hoey]

I agree. There have been so many mergers that I give up on the names and what they call themselves now. They have definitely moved away from being small and really local—they try to close their local housing offices as soon as possible once they have taken over.

On my hon. Friend’s point about leaseholder charges, some people have been ripped off for years by housing associations. In the case of Hyde Housing, it was only because a group of residents got together and spent hours and hours looking at the issue in detail in order to prove their case that it accepted that case, apologised and will pay the money back. In my area, the most success, in terms of the management and the residents’ enjoyment of it, has come from successful, small TMOs. They have really worked. They have been given the power and more control. One of them, Holland Rise and Whitebeam Close, has taken over the concierge system and is running it brilliantly. The staff like being there now—they feel that they are involved in the estate and know the residents. In the past, Lambeth council ran the concierge system for all the blocks, and the TMO had to put up with its management and style.

I will probably get into trouble with my councillors for what I have said, but some good things are happening in Lambeth. The issue is about investment and money, but it is also about more than that. I support the Government’s proposed changes in relation to rents and councils being able to control that money. However, we must make sure that there is a mechanism that ensures that that money is spent properly. Local is best, but local councils do not always do the right thing with the money.