Council Housing

David Drew Excerpts

Tuesday 27th March 2018 Commons Chamber

[Dr David Drew (Stroud) (Lab/Co-op)]

I am delighted to make a short contribution, which I am sure the Minister will be pleased to hear. I congratulate my close colleague on this issue, my hon. Friend the Member for Warwick and Leamington (Matt Western), on securing the debate. What he said was well worth listening to. I wish to make a couple of observations that relate largely to my locality of Stroud. I come to help the Minister, not in any way to criticise, because we have to recognise that this is not about party politics. It is about the fact that we need to deal with the housing problem, and we need to deal with it now.

I am making this plea following a letter that was sent by my local authority, Stroud District Council, on my behalf and that of the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). He does not necessarily sign up to everything in the letter, but we felt it was important to send it to the Department so that it understands some of the issues we are facing. This is about the way in which the housing revenue account is now, bizarrely, almost acting against the very thing the Government want, which is to build more houses and make sure that they are fit for the people who desperately need rented accommodation.

The letter makes two pleas: first, as my hon. Friend the Member for Warwick and Leamington has said, to adjust or possibly remove the current borrowing cap so that Stroud District Council can undertake further prudential borrowing consistent with its 30-year business plan; and, secondly, to enable the council to use 100% of its right to buy capital receipts to build those new council homes. Stroud District Council is not unique, but it is unusual in that it now owns its own stock. We bid £98 million for the self-financing regime that the Government kindly made available, so this is a question of the council wanting to use its own resources in the most appropriate ways.

Stroud District Council has had a five-year capital programme to build some 236 council homes, which for a small area such as Stroud is a not insignificant commitment and contribution. That has not in any way crowded out the private sector, but has been in addition to it. These homes are of a high standard, and they are taking people out of fuel poverty, while lifetime arrangements mean that these quality homes are ones that people want to live in. It is a myth that people end up in council housing because they have no alternatives. These are very much sought-after homes, and ones that we want to see alongside other forms of affordable homes.

Local business is very supportive, and it has highlighted the need for housing to be given a very high priority for the simple reason that that is how people can live and work in the Stroud district. We estimate locally that we need 425 new units per annum, which, at the moment, is in effect all the units being provided. However, of the 430 new homes built in 2015-16—the last year for which we have figures—only 120, or 28%, were affordable, which is well below our level of need. This is a question of our not meeting the current demand.

There are 2,525 households on the housing register, with about 440 new lettings of social and affordable housing each year. Rent levels in the private sector are increasing much more quickly than we want, which leads people to look for alternatives to the private sector—one of those alternatives is council housing—and that is particularly true of younger people. In Stroud, the average wage to house price ratio is now 1:10, which is above the national average of 1:8. That means fewer people are becoming owner-occupiers, which is another reason why they are looking for alternative rented accommodation.

Dare I say it, but the private rented sector in Stroud is not necessarily good, which again drives people to look at ways in which social housing, particularly council housing, can provide an answer. There are elements we always want to provide, such as extra care. That needs to be mentioned, because this is not just about younger people or younger families, but about providing a social care element. It is only really the council that can do so, because it recognises that it must supply such support. We have also had a 30% increase during the past year in homelessness applications, which is another driver.

One thing for the Minister to address is the local housing allowance. In a previous debate, I argued that the simple fact that Stroud is included with Gloucester and the Forest of Dean causes us problems. We are an area with higher rents, which means that, because the local housing allowance is based on an average, people paying rent have to make good the difference between what they are allowed and what the benefit system permits them.

I appeal to the Government to work with us to allow us to carry on with our council housing programme. The local plan allocates over 5,000 homes, but sadly too few are coming forward. If the local authority could play a bigger part we would be able to bring forward those homes and ensure we deal with the housing shortage, which I am sure Members on all sides of the House agree is real and pertinent. We need a range of housing, including council housing. This is a cross-party agreement. We are a hung council. The local Conservatives support the programme and were instrumental in it, and they have been willing to stay with it over a long period of time. We need help to either remove or relax the housing revenue account, so we can get back on with the programme.

Sadly, the cap means it is likely that we will have to pay back to the Government £1 million in unapplied right-to-buy receipts for 2016-17. The Minister looks a bit curious, but that is the reality. If we do not have the ability to match fund, we pay back the money from receipts. I do not expect the Minister to say he has a magic solution, but perhaps he could look at that to ensure we do not have such anomalies in the system which mean that the very people who want to build are being prevented from doing so. The 1% rent reduction makes matters worse, because of its impact on the flexibility that councils need for their business plans—in our case, a 30-year business plan. Overall, that has a negative impact of some £10 million, which is a huge influence on the number of houses—we reckon 100—that we want to build but have not been able to.

I hope the Minister has listened. I do not expect him to come up with all the answers, but we will work with him. We are a good authority. We want to overcome the problems of the lack of affordable housing, particularly council housing. I hope he has heard us and will be able to say that the Government are at least willing to contemplate looking at the borrowing requirement and how right to buy affects authorities like Stroud.