Decent Homes

Grant Shapps Excerpts

Thursday 27th January 2011 Westminster Hall

[Tom Brake]

I thank the right hon. Gentleman for that intervention, but he has simply restated the Opposition’s stance that the profiling is different. That does not really help to define in what way his party would have tackled the issue if it had been in power. Simply saying that this is to do with profiles does not actually help residents in his area to have some clarity.

[The Minister for Housing and Local Government (Grant Shapps)]

Is my hon. Friend aware that there is no profiling or front-loading in respect of the decent homes funding in this spending period?

[Tom Brake]

I thank the Minister for that intervention, and the right hon. Gentleman may want to consider that point.

I want now to focus on the position in the London borough of Sutton and to run briefly through some of the history. Sutton’s ALMO, the Sutton Housing Partnership, was one of the ALMOs that achieved two-star status only very late in the day under the previous Government. It had achieved one-star status and was on track to achieve two-star status when the previous Prime Minister announced that his Government were going to build 20,000 new homes. As Members may recall, it then emerged that that would be achieved by reallocating funds from ALMOs that were about to receive funding for the decent homes programme. When Sutton Housing Partnership achieved two-star status under the previous Government, it found that it would not get decent homes funding because of the previous Prime Minister’s announcement. Let us not say, therefore, that everything that is happening now is wrong, while everything that happened before was acceptable, because it was not. Under the previous Government, some ALMOs did not receive the funding that they had been offered.

--- Later in debate ---

[Jeremy Corbyn]

That sounds like a depressingly familiar story. Indeed I have had similar relationships with a number of housing associations, including the Peabody Trust, in my own area. There needs to be a Select Committee investigation into the governance, accountability and democracy of housing associations. That would be a very good area to discuss. Having said that, I pay tribute to Islington council for setting up a well-run ALMO and for its attempts to co-ordinate the work of housing associations, the council, building programmes and the community to ensure that we get family-sized housing, which is in the greatest demand.

We also need to consider the standards of management and, where possible, amalgamate the management of housing associations and the council in particular areas. There can be six or eight housing associations operating on one estate, which is not a sensible way in which to run things. Tenants will have six or eight caretakers, six or eight managers and six or eight cleaning contracts. How about just having one? Clearly, there is a need for us to investigate that area as well.

I also want to thank the people who work in housing in my own borough—the caretakers, the cleaners, the repair people and so on. They are not often thanked; they are usually criticised and blamed. The majority of people who work in the public sector do so because they want to. They want to do a good job and to co-ordinate well with the tenants and the local communities. I want to praise them for what they do and the way in which they try to respond to people’s needs.

The Select Committee report says quite a lot about the private rented sector. The history of that sector in this country is a particularly chequered one. The Labour Governments of the ’60s and ’70s sought registration, rent control and a degree of national standards in the private rented sector. The tenor of the Conservative Government of 1979 was against any kind of intervention in anything. The results included a property boom, privatisation, the sale of a lot of council properties and landlords’ freedom to charge whatever they wished. Now, in order to adhere to national law on housing homeless families, local authorities have absolutely no choice but to place those families in the private rented sector. They have a legal obligation to house people. No London council still puts people in bed and breakfasts—as far as I know, anyway. Instead, they put them in the private rented sector, which is expensive, often inadequate and sometimes nowhere near the community from which those families come. The bill is usually paid by housing benefit.

The Government’s solution is to cap housing benefit, which will mean in turn the removal of large numbers of people from central London. That is not a solution. The solution must be to support housing benefit, but it must also involve considering the impact and costs of the private rented sector on our society. Paragraph 162 of the report points out how many private rented properties the UK had in 2007. The number has increased a great deal since then, and I observe that it is increasing even faster at present.

Paragraph 173 is interesting. The Committee took evidence from Professor Tony Crook, professor of housing studies at the university of Sheffield, who discussed the influx of small-scale landlords, the number of buy-to-let mortgages that were granted and the resulting boom in the private rented sector. Shelter wants good-quality conditions in the private sector and is chary of introducing rent controls, as it thinks that that might reduce the number of places available.

I can see Shelter’s point, but it seems to me that we in this country have built in an enormous problem for ourselves. People in my constituency who live in the private rented sector, unless they receive housing benefit, spend the highest proportion of their disposable income on housing—far more than any mortgage payer or social tenant—for the worst conditions and, generally speaking, the worst services and repair levels. The issue is not going to go away, and if my constituency is anything to go by, private tenants will increasingly start to come together and be much more vocal about it.

I support close examination and inspection and the use of building control and legal proceedings to ensure decent homes, decent repairs and decent quality, but we cannot escape considering rent levels in the private sector. It is done to some extent in the United States and to a great extent in Germany and many European countries. I do not see why we should not start considering a similar process in this country. With the best will in the world, even if a Labour Government were spending billions of pounds of capital investment on new housing at present, there would still be a housing problem in five or 10 years’ time, particularly in London. It is an issue whose time has more than come, and a serious examination of it is needed. I hope that the Select Committee is prepared to undertake it.

The Shelter document that I obtained in advance of today’s debate made this point:

“More than £4 billion of taxpayers’ money is spent annually on housing benefit for private renters and this is set to rise to nearly £6.7 billion by 2010/11.”

We do not yet know what the effect of the cap will be, but that is what we are paying at present. It goes on to make a good point:

“The sector doesn’t function well enough. Too many tenants live in terrible conditions…Too many responsible landlords and professional property managers are undercut in the market by slum landlords”.

I understand that point. There are good landlords out there who try to manage things properly, charge reasonable rents and be reasonable people, but then a cut-throat arrives next door and undercuts them or gets rid of them by other means. It is not a nice business in some areas. Shelter says:

“Too many landlords are confused about, or are unaware of, what their obligations are.”

Taxpayers lose a great deal of money every year as a result, so tackling rogue landlords is very important and another issue to which I hope that the Government and the Select Committee will pay attention.

In areas such as mine, housing is the absolute, No. 1, top-of-the-list, key issue. If someone is a council tenant, they have security of tenure—unless the Government’s new proposals under the Localism Bill come in and that security of tenure is under threat.

[Grant Shapps]

Is the hon. Gentleman aware that there is no proposal whatever to remove security of tenure from any existing tenant?

[Jeremy Corbyn]

That was a very good use of words by the Minister, and I compliment him on it—Sir Humphrey would be proud. But, for new tenants, there is a proposal whereby it will be permissible for local authorities to limit the term of tenure or to review it. Given the divisive nature of the plan, if we take that five, 10, 15 or 20 years down the road, the public sector will mirror the private sector as it is today. A tiny proportion of private sector tenants have the 1960s and 1970s rent protection—there are just a few left. I want security of tenure for all council and all housing association tenants, with no time limit placed on it.

The need for investment in good-quality housing could never be greater. Children growing up in overcrowded accommodation under-achieve in school and suffer more illness. Families break up. It costs us all a lot of money. There are an awful lot of broken lives and broken ambitions because of people living in poor-quality, overcrowded accommodation, some of which is in the public sector. People living in private rented accommodation may be forced to move every few months because the landlord decides that they can get more money from someone else, or decides to sell the property and move on, or whatever else. People have to cope with disruption to schooling and endless moves around the place. A tenant on housing benefit in the private rented sector has no negotiating power vis-à-vis a private sector landlord.

It is up to us and the public sector as a whole to ensure protection, regulation and security, so that children know where they are going to stay, families know where they are going to stay and the communities benefit from that as a whole. My ambition is to see far more council housing built, purchased and managed, with the good quality that is possible within it, and to see a degree of regulation in the private sector that will give people the security of tenure that is so desperately needed. Otherwise, we are just failing in our duty.

I compliment the Select Committee on the report that it produced and the debate that it has encouraged today. I urge it to do further investigation work, particularly on the role of the private sector in housing supply in this country.

--- Later in debate ---

[The Minister for Housing and Local Government (Grant Shapps)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Bone. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate—or, rather, the Backbench Committee on nominating it and the Chairman of the Select Committee on securing it. It has been a high-quality debate and, after listening to it for the past three hours, I know why. It started with a political back and forth in the opening few minutes, but it then settled down to be a most intelligent and well-argued debate, with people who are passionate about social housing. It has been very good. In that spirit, I will follow the same path.

Let us get the politics out of the way. We know that the money had run out and that it was no longer possible to continue borrowing money we did not have to build a greater deficit that our children and their kids would carry on paying for the rest of their lives. Something had to change. When the hon. Member for Sheffield South East spoke about “our cuts,” I had to resist shouting back, “But they are not ‘our’ cuts!”; they are the cuts that the previous Administration were not prepared to make.

I am delighted that that is out of the way, because I can now start to address, in as much detail as possible, the excellent comments that have been made this afternoon. I shall preface my comments by saying that, despite the economic environment in which we find ourselves, the decent homes programme has not been cut by anywhere near as much as the Chair of the Select Committee suggested. I want to pick him up on his twice-repeated claim that there has been a 50% reduction to the programme. That is untrue. A reduction was made to the programme under the previous Administration. My predecessor, the right hon. Member for Wentworth and Dearne (John Healey), raided the programme for £150 million in—I speak from memory—July 2009 to pay something towards the so-called housing pledge, which is the new build programme. That was the first cut to the decent homes programme.

I think I am right in saying that some £319 million was indicatively signalled to have been spent on the programme, but, despite these economic times and some tough decisions, we are still spending just over £2 billion on decent homes, which, thinking back to the spending review, is more than most commentators thought likely. It is divided into about £1.6 billion to local authorities and £500 million to help some of the organisations that are in transition having left local authorities. I just wanted to put that on record. It could be argued that the reduction is 15% or 20%, but not 50%.

[Mr Betts]

I have a note based on information from the scrutiny unit of the House, which indicated that the reduction was from £2.6 billion over three years to £2 billion over four. It said that that was a cut of 42% without taking account of inflation, so I think that my figure of a 50% cut is about right.

[Grant Shapps]

We could knock these figures back and forth, but I reject the idea that the cut is about 50%. I accept, however, that more money needs to be spent on decent homes.

[Chris Williamson]

Will the Minister give way?

[Grant Shapps]

I hope that the hon. Gentleman will not mind my making a little progress. Others have spoken for a lot longer than I will get to respond to the many points that have been raised.

We are putting in £2.1 billion, but I would estimate that we need about £3.5 billion to truly finish the programme. I expect that, by April, about 210,000 homes will still be in need of decent homes funding, and the programme throughout this Parliament may cover about 150,000 of them.

The Chair of the Select Committee also asked for greater flexibility for local authorities to, for example, put in a boiler but charge 0.5% more rent. That is a very sensible suggestion and it requires no intervention from me. Local authorities are absolutely within their rights to do that. The guideline rents that we currently provide mean that they already have flexibility, and the direction of policy in the Localism Bill, which is at Committee stage, is to do precisely what he says. It is an excellent idea and one of the very good suggestions that have been made.

My hon. Friend the Member for Carshalton and Wallington (Tom Brake) raised the issue—perhaps he did this inadvertently, but it also came up in a later exchange—of the value of ALMOs versus housing associations versus local authorities. I do not particularly want to enter into this debate, other than to say that, from a Government perspective, I have a completely neutral view on whether an ALMO is better than a local authority or a housing association. Indeed, there have been some very interesting exchanges throughout the afternoon, and they have all been argued from the individual perspectives of constituency MPs. We know that, at certain times, an ALMO can be very good or very bad, and the same can be said about a local authority or a housing association.

There are even arguments about the size of housing associations, from vast conglomerates—I have a great deal of sympathy with some of the comments about the distances sometimes involved—to some small ones. In my experience, having travelled around the country a lot, looking at different types of housing, there is no single prescription for the right size or shape of organisation to run housing.

The hon. Member for Stockport (Ann Coffey) made a number of interesting points. I was impressed in particular by her comments on the quality of the environment and on how important design is to the way people feel, which was picked up again by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), when he talked about walking into a block of flats and how the entranceway can make all the difference.

The hon. Member for Stockport also made the point about walking into the home of someone who has had the decent homes work done—the delighted tenant—and sharing in that delight. I am sure that, as constituency MPs, we have all been in that position. I put it on record that, in the previous Parliament, I was the Conservative Opposition Member who represented the most council tenants in the country—I have not checked for this Parliament. On many occasions, however, I have walked into a kitchen or bathroom and been greeted by the delighted tenant. It is an absolute pleasure.

I also put it on record that I believe in the decent homes programme. It was an achievement of the previous Government. I accept the comments of the hon. Member for Vauxhall (Kate Hoey) and others, including the hon. Member for Derby North (Chris Williamson), that it probably started four years too late, but it did a lot of good work. I also accept the arguments of the hon. Member for Islington North (Jeremy Corbyn) and others, that it sometimes carries on doing work where it is not quite required to do so, or doing it in a uniform or almost machine-like fashion, at times unnecessarily ripping out perfectly good accommodation or facilities, as mentioned by other Members.

My hon. Friend the Member for Wolverhampton South West (Paul Uppal) talked about the importance of apprenticeships. I absolutely agree with what I thought was a thoughtful contribution from him. We have a great opportunity, with today’s economic backdrop, to ensure that local skills are being used or upgraded to provide improvements for people’s homes. It is the perfect mix and combination, given the opportunity of the £2 billion-plus to ensure that it happens in the future.

The hon. Member for Lewisham East (Heidi Alexander) made a number of interesting points about estates still requiring regeneration. I offer to engage with the hon. Lady to listen to the problems and to be of as much assistance as possible. It is not easy, the money does not exist and we have had to make difficult decisions, as she and everyone else appreciates.

However, I wanted to correct one point in the hon. Lady’s speech, when she seemed to suggest she believed that the local authority would have to contribute 10% towards the costs of decent homes. That is not what the Government said. I said that if more than 10% of repairs were needed in order to reach decent homes standard—if there were more than 10% non-decent stock, in other words, which I believe would be the case in Lewisham—authorities can apply for decent homes funding. It is not that they are then expected to pitch in 10%, although in fact it might be a good idea for them to do so. I just wanted to ensure that that got on the record.

[Tom Brake]

The Minister mentioned estates that still need renovation. Can he confirm that it would be strange if ALMOs with two stars, which put a programme to Government that demonstrated their capacity to deliver and carry out that estate renovation, were not given some priority in the bids?

[Grant Shapps]

My hon. Friend is right to point out that what should count is the quality of the organisation, its ability to deliver and the need on the ground. I feel strongly that it is wrong to penalise tenants for whom it is almost impossible to do anything about the lousy management of their property, because they happen to have a useless landlord, and then penalise them again for that very fact.

My hon. Friend’s wish will come through in the work that will be done by the Homes and Communities Agency in assessing those bids, which will be taken further next month. It seems natural that those organisations that are well run and have a good plan will be more successful within the limited resources. If they are good, they are good. I do not think that two stars necessarily means that an organisation is good; it can all too often mean that it is good at ticking the right boxes, and employing too many consultants on too high a salary to jump through hoops, which is irrelevant to the lives of people on the ground. I am sure, however, that there will be a correlation.

In response to the hon. Member for Lewisham East, and to the many Members who raised this issue, the revenue account will be a vital part of the reform package. We have established that in our view the country does not have the money to completely finish the decent homes programmes—to make significant further progress during this Parliament—but we can carry out housing revenue account reform, and we are legislating for that right now in the Localism Bill, building on the work undertaken in the consultation by my predecessor, the right hon. Member for Wentworth and Dearne. One upshot of that will be an ability to plan for the renovation, repair and renewal of local authority stock for the next 30 years. I am very keen, as the hon. Member for Lewisham East pointed out, to get that provision through, and I look forward to support from right across the House in securing the progress of that part of the Bill. I do say to the hon. Lady that Lewisham’s chief executive could perhaps make a personal contribution by reducing his £192,000 salary. Times are tough, and I would have thought, as other Members have pointed out, that that would be a very good place to start.

The hon. Member for Islington North raised the point about two-star ALMOs. I have talked about how the system was unfair, and I am pleased to sweep it aside. In addition, I really do not mind if local authorities want to continue to manage their stock for ever. That is entirely their business, and this Government will cease the tricks of pushing local authority stocks into different forms of management. I sense from this debate that there is cross-party agreement on that matter, on the part of many MPs. The hon. Gentleman also mentioned the subject of ending lifetime tenure, and affordable rent, which he and I have discussed previously. The most important thing that we can do is to provide more homes and upgrade the homes that we have.

I have judged that, given that the previous Government put £17 billion into building more homes, after 13 years they ended up with a net loss of 45,000 homes. Yes, there was the right to buy and yes, pathfinder knocked down homes, but if we tried to use that maths again, we would discover that we needed £50 billion to £100 billion from the Treasury simply to build more homes in that way. In other words, something was not working, and we needed to find a different solution. Affordable rent is my version of that solution. We can now use the additional money, in the way that the Chairman of the Select Committee suggested we do for renovation, for building more homes, and that will be a sensible step forward.

My hon. Friend the Member for Loughborough (Nicky Morgan) made a number of important points, about the additional amounts of money sometimes required for homes built in different types of fabric—I know that the Homes and Communities Agency will take that issue on board—and, in common with several other Members, about round 6 bidding. Round 6 was never approved, so no one on the ground should have ever thought it was definitely going ahead. I will be meeting the hon. Member for Nottingham South (Lilian Greenwood), and I make the same offer to my hon. Friend and to Members across the House, to meet to talk about the issues and the possible ways forward.

I thought that one of the best speeches of the afternoon was made by the hon. Member for Vauxhall, who rightly pointed out so many of the common-sense realities of housing, and whose speech was devoid of any political back and forth. Many of the same issues were raised by other Members, but I thought that hers was a great contribution.

In response to the hon. Member for Nottingham South, I can say that I have visited Nottingham City Homes and have even had its chief executive, Chris Langstaff, to my office here in Parliament. I know the great work that the organisation does, and I know that that work will be able to continue. With the flexibility that we are now providing through localism, with money going locally rather than through larger regional organisations, and through the housing revenue account reform, organisations such as Nottingham City Homes will be able to continue to upgrade homes, albeit at perhaps a slightly different pace.

My right hon. Friend the Member for Bermondsey and Old Southwark made a great contribution. He and I have discussed housing on many occasions.