Regeneration

Debate between Grant Shapps and Clive Betts

Thursday 19th April 2012 Westminster Hall

[Mr Betts]

The hon. Gentleman makes an interesting point. It has been said, in particular about helping with skills and improving people’s availability for employment, that what happened was that people in Newham who got that help then moved to other areas. There are clearly challenges to making regeneration successful. One of the criticisms we made in the Select Committee report was about learning lessons from the past. We should look at where money has been spent—the hon. Member for Harrow East (Bob Blackman) was keen on that in the Committee—and at what was got right and wrong.

We took evidence from Lord Heseltine and went to Hulme to look at the city challenge area which, in everyone’s view, was a success. It was, however, a 20-year project and, to begin with, did not go well. Lessons were learnt from initial failures, but it was a 20-year programme with the public and private sectors working together; it was about not only buildings but skills, employment opportunities and the general environment of the area. It was also a lot about demolition of some really bad properties, and their replacement with new, attractive properties in the private as well as the public sector, as we saw on our visit.

The issue of the long term is so important. The hon. Gentleman is right that we can have long-term projects that still go wrong, but if we do not do things for the long term we will not get some areas right at all. There was a lady in the community centre in Rochdale who said to us—she had not been briefed and she put it in her own way—“It is a bit like going on a weight-loss course. It is easy to get a few pounds and even a few stones off at first, but it gets harder and harder. You have got to keep working at it. If you don’t keep going at it for the long term, you clap the weight back on and all the hard work of the previous time has been lost.” That is a real worry now in some housing market renewal areas—that the investment has gone in but stopped halfway, so some of the benefits will be lost. That lady’s comments always stuck in my mind. She was so enthusiastic about her area because it had been about improvements to the school and to employment opportunities. I remember she said, “I used to be ashamed to bring visitors. In fact, I used to pretend that I didn’t live here. Now when they come to visit, I walk down the street with pride because of what has been done.” That is an awfully good testament to what happened.

We ought to learn lessons from the failures. I am trying not to be party political, and the single regeneration budget had some successes but, very often, it was spread too thinly around the place, to give everyone a little bit but without achieving any long-term benefits. Let us learn from the problems of the past as well as from the successes achieved—that is a bit of common ground with the Minister at least. The regional growth fund was proposed as a possible solution, but Lord Heseltine has told the Committee, absolutely bluntly, “This is not about improvements for housing. There is no money here for those sorts of initiatives.” He told us that, in words of one syllable. He basically said, “It doesn’t matter what the Minister says, I am in charge of this”, and I am sure that the Minister does not want to argue with Lord Heseltine on such points.

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

wondered whether the hon. Gentleman had noted that two major housing market renewal areas were covered by the £2.4 billion regeneration money.

[Mr Betts]

Some schemes will affect HMR areas but, in terms of pure concentration on regeneration issues, Lord Heseltine was quite clear to us that the focus of his scheme was about jobs and not about improving homes in any shape or form.

[Grant Shapps]

Will the Chair of the Select Committee accept my point that people in regeneration areas really do not give a damn which budget is being used to regenerate the area?

[Mr Betts]

Most of the people that I have spoken to simply hope that some budget is available—that is our criticism about identifying what budgets were available. We had the Growing Places fund which seemed to be mainly about benefiting places that are growing, rather than places of market failure.

I will make one aside, which is probably party political. Yes, of course there are reductions in public expenditure, but is it really fair to have a 19% overall cut in public expenditure in the current spending round, a 28% cut in local authority grants, a 50% cut in funding for social housing investment and a 100% cut in regeneration funding through the HMR scheme all at once? That is to put the situation in stark terms.

Let me continue, however, by saying that the Select Committee recognised some really positive developments. We certainly welcomed tax increment financing and local enterprise partnerships, but we wanted to be sure that LEPs were aware of the need to link into regeneration areas. If LEPs are creating jobs, how can they then help to benefit people in some of the poorest communities? That is a positive point. TIFs of themselves are not aimed in particular at regeneration schemes, but they can of course create projects that benefit people in regeneration areas, although how that funding can then be properly linked is a challenge.

We were pleased by the Government commitment on the European regional development fund and their intention to spend all the ERDF budget. Indeed, the Committee will do a further report on that. That has potential for the gap funding to which I referred. The challenge is ensuring that the funding is used and that it is used as constructively as possible in regeneration areas.

We also very much welcome the extra transitional funding of £35 million that the Government found. That was helpful, because of the despair in some of those areas, where only one in 10 houses are lived in and people are struggling in desperate circumstances. To have the funding simply cut off was a real blow, so it was good to have a bit of money put back in the five worst areas, with matched funding from councils, to help people in such conditions. I am sorry about comments in the press in the past few days from some people, who do not live in those areas, complaining that the Government are funding demolition. Of course they are. If nine out of 10 houses are not occupied and we still have to deal with the one that is, the only logical conclusion is to demolish, and to create the area for future regeneration. Of course that is the logic. The Government should be supported in doing that and in working with councils on the problem—I certainly do so.

--- Later in debate ---

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

Thank you, Mr Howarth, for your chairmanship in the second half of this debate. It has been an enormously good and welcome discussion, and I congratulate the Communities and Local Government Committee on having instigated and written the report and pushed it through to a conclusion, including this valuable debate. It has given us the opportunity to air a subject that, as hon. Members have said, is not always aired as much as it should be. It is a matter that is vital to our citizens and the economic future of the country.

Unlike many Select Committee reports that I have largely welcomed, on this occasion—as a one off, I am sure—I think that the Committee has got it wrong. My reason for that was revealed in the contribution made by the excellent Chair of the Committee, the hon. Member for Sheffield South East (Mr Betts), whose opening speech concentrated almost entirely on what one might call the housing element of regeneration, and in particular the ending of the housing market renewal programme. Indeed, he went so far as to say that things to do with economic change in the country, such as High Speed 2 and Crossrail, could not be counted as regeneration. That theme was picked up in other contributions, particularly from Opposition Members, and led to the Opposition Front-Bench spokesperson giving the reasons why, in her opinion, the Supporting People programme has nothing to do with how we regenerate communities.

There seemed to be, however, some cross-party agreement about the idea that we cannot just regenerate. My hon. Friend the Member for Harrow East (Bob Blackman) made the excellent point that we can go ahead and rebuild and reshape the physical nature of a community—I am very familiar with the Stonebridge Park estate, which I know well—but 20 years down the line we could end up with the same levels of deprivation, and if we do not tackle those problems, we will not truly regenerate. The Supporting People programme is an important element of that. I do not seek to wrap it up and claim that the regeneration fund is bigger than it is, but if the £6.5 billion is not viewed in the context of regeneration, in many ways it will be wasted in the overall scheme of what it actually means to change lives and regenerate communities for the future.

[Mr Betts]

I hope that the Minister did not misunderstand the Committee’s comments. No one was denying the benefits of the schemes in the Government’s report, but he says that because a scheme such as HS2 will benefit areas that require regeneration, along with the rest of the country in terms of economic growth, it should therefore be counted as regeneration funding. That is in absence of a strategy for how that stream of funding will connect with other funding and benefit the poorest areas where market failure has occurred. That is the problem with the Government’s approach.

--- Later in debate ---

[Grant Shapps]

Here we have the fundamental difference of view. I think that we cannot simply do regeneration to people or communities. When we try to do regeneration without improving the economic viability of an area, it simply fails and 10, 20 and 30 years later we are left in the same mess that we were in initially. There can be no finer illustration of that point than the housing market renewal programme. As I listened to some of the contributions from across the Chamber, my blood was starting to boil. The description of the housing market renewal programme that I heard this afternoon was so distant from the reality on the ground over the 13 years for which it was in place—in fact, it was slightly less than that—as to be a grotesque bending of the truth.

This is what one independent group called Save Britain’s Heritage highlighted about the housing market renewal programme. It said that Government inspectors condemned whole rows of terraced houses based on 10-minute visual inspections, even though it would have been cheaper and much more sustainable to refurbish those houses. In fact, the Select Committee in, I think, 2005 said that the designation of areas for demolition in effect increased deprivation in those areas. Many social landlords prepared the ground by voiding and boarding up properties. In turn, that undermined the housing market values. My hon. Friend the Member for Rugby (Mark Pawsey)referred to the hope value—he did not quite describe it in that way—of the private sector waiting for the public sector to come in and improve its returns. The Select Committee describes that as deliberately managing decline to make the notional benefits of wholesale demolition and redevelopment more attractive, ensuring larger windfall gains for the state.

Managed decline was precisely the right description of the housing market renewal programme, which I believe was a national scandal. In fact, I would go as far as to say that the housing market renewal programme was ultimately a huge disappointment. I have the figures with me. It destroyed 10 times more homes in this country than it built. Nothing—no programme—did more to destroy homes and communities in this country than the Luftwaffe in the second world war, but the housing market renewal programme did more housing destruction and community destruction than there has been at any time since the war.

[Mr Betts]

I want to say how fundamentally I disagree with the Minister. I just wish that he would make the visit that I made to Merseyside and talk to people about how the programmes there were developed in consultation with and with the agreement of the local community. The problem, of course, is that before we do the rebuilding that the Minister is talking about, we have to do the demolition. The rebuilding has been stopped to a large extent because the Government have now cut off the funding. That is the reality of the situation, is it not?

[Grant Shapps]

The reality of the situation is that more than 10,000 homes were destroyed by the housing market renewal programme and just 1,000 homes were built. That is the reality of the programme. The Chairman of the Select Committee should be aware that I have visited Liverpool, Sefton, Hull and Stoke-on-Trent on numerous occasions. I went to Stoke-on-Trent to launch the £35 million, doubled up by local spending to £70 million, in order for there to be an exit from the housing market renewal programme. I recall that I met a woman there who described the programme: how people had come in from outside, it was called a consultation, but the community hall was so full that the meeting had to be broadcast outdoors. They were told that their streets would be knocked down. They are still suffering to this day from the damage that the housing market renewal programme did. It was a national disgrace, and I was pleased to bring it to a close. The programme was an enormous mistake.

Local Government Finance

Debate between Grant Shapps and Clive Betts

Wednesday 8th February 2012 Commons Chamber

[Grant Shapps]

I will take two more interventions and then make a little progress. I give way to the Chair of the Communities and Local Government Committee.

[Mr Clive Betts]

(Sheffield South East): Let us get this absolutely right. Despite his justifications about the details, the Minister seems to be saying that, in the end, the authorities with the greatest needs tend to be those with the greatest amount of Government grant; that the biggest amount of their spending therefore comes from the grant; and that those authorities will therefore have the biggest cuts to their spending power. Is that what he is saying to us?

[Grant Shapps]

The Chairman of the Communities and Local Government Committee knows the issue better than that. He is familiar with the numbers involved because, apart from anything else, his Committee has spent a lot of time looking into the matter. For the sake of others in the House who might be getting carried away with his argument, perhaps it is worth selecting some figures. Hackney, for example, a relatively deprived area, receives £3,050 per household. Windsor and Maidenhead, perhaps thought of as a more leafy area, receives about half that amount at £1,537—a demonstration if ever there were one that more deprived areas receive a lot more money than less deprived areas.

--- Later in debate ---

[Grant Shapps]

The right hon. Gentleman is aware that every Opposition normally spend their time arguing that Bills should not be tucked away in some Committee Room, up on the lower or upper corridor, but debated on the Floor of the House. That means that every Member of the House has the opportunity to take part in the debate and that nobody is excluded. I would have thought that that was a thoroughly good thing, so I am proud that we took such important business in Committee on the Floor of the House. It genuinely gave the opportunity to Members, as the people’s representatives, to come and make their points, and it is a good approach that should be followed.

Just as we did last year, we have pushed the system as far as we can to reach a settlement that is sustainable, fair and progressive, and that allows councils to freeze their council tax.

[Mr Betts]

Will the Minister give way?

[Grant Shapps]

I hope all hon. Members would agree that I have been more than generous with interventions. I am keen for others to be able to speak.

We will continue to work closely with councils to give them the freedom, the tools and the support that they need to get every penny of value out to the taxpayer. I believe that this is a local government settlement that will be welcomed around the country.

Oral Answers to Questions

Debate between Grant Shapps and Clive Betts

Monday 20th June 2011 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

The Minister will be aware that some Labour Members are rather sceptical about whether the new homes bonus will deliver more homes than were being built before the recession. Given that no research is being done into the effectiveness of the scheme, and that there is no evidence about such schemes in other countries, does he agree that it would be appropriate to have an independent review of the scheme’s effectiveness? If so, what period of time should the review cover?

[Grant Shapps]

The Chairman of the Select Committee is wrong to say that no research has been done into the scheme. Indeed, the impact assessment stated that it would increase house building starts and, as I have just said, there has been a 22% increase in house building starts in the first year of the policy. Let us compare that with the year before the policy was put in place, when house building under Labour was at its lowest level since the 1920s. There is therefore growing evidence that the new homes bonus is working rather well.

Oral Answers to Questions

Debate between Grant Shapps and Clive Betts

Monday 4th April 2011 Commons Chamber

[Grant Shapps]

It may have escaped the attention of Opposition Members that the new homes bonus rewards the authorities that build homes. That is why it is called the new homes bonus. Of the five areas that are building the most homes—the five top councils to receive the new homes bonus—three of them are in the midlands and the north.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Government’s stated objective is to ensure that more new homes are built than were being built before the recession. I am sure that it is an objective with which we can all agree. However, if the new homes bonus does not incentivise individual authorities sufficiently so that the sum total of all the individual parts does not meet the Government’s objective, what is plan B?

[Grant Shapps]

The point about the new homes bonus is that it is just one element in a series of steps that we are taking to ensure that house building goes ahead. The hon. Gentleman is right to mention that it slumped to the lowest level since 1924 under the old top-down targets. The new homes bonus will ensure that £200 million is distributed today, but it does not stop there. We are also proposing build now, pay later. We are slimming down some of the many regulations that prevent house builders from getting homes built faster, and we are encouraging them to renegotiate section 106.

Local Government Finance

Debate between Grant Shapps and Clive Betts

Wednesday 9th February 2011 Commons Chamber

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

It must have been an incredible experience to stand at this Dispatch Box for the local government finance settlement in any of the past few years and announce on a whim yet more money being piled up and sent around the country in various directions. Unfortunately, we do not live in that kind of world today, and the sad thing is that we did not live in that kind of world even then. The previous Government thought that they had money to spend, but the truth was that it had long since been spent. A year ago, all they were doing was standing here and spending money that had never been raised, that was not available and that would actually have to come from the children of every Member of the House and of all our constituents for many years to come.

At the election, people had a choice, and their decision was to elect a Government who were primarily going to get on with cutting the deficit. Today, however, there has been not a word of apology from the Opposition for getting us into that enormous financial mess that meant that this country had the highest deficit of any country in the western world—of any OECD top 20 country. Do they recognise that as a fact? Do they understand where things went wrong? Are they here today to apologise and to show that they are going to set a new path? Absolutely not, because as we saw at lunchtime the policy vacuum on the Opposition Benches is quite literally a booklet with empty blank pages inside.

There has been no response and no sense of where those cuts would fall. The Opposition do say that there would be some cuts; it is just that we are not allowed to know where they would fall. The Opposition accept that local government spends a quarter of all government money, but it seems that none of those cuts would be in any way painful under their budget, which, they say, would halve the deficit over this Parliament.

Halving the deficit, however, is not enough. I believe there is a fundamental misunderstanding of how this country’s accounts work. Indeed, perhaps that was the problem over 13 years: the previous Government did not understand that, if we only halve the deficit, we will still pile up debt. The figure of £44 billion, which we are currently spending at record interest rates just on repaying the interest alone, would have gone up to £70 billion and more, yet the Opposition have not a single answer—not a single penny—to offer up to this debate. Therefore, their contribution has been all but pointless.

[Mr Betts]

The right hon. Gentleman refers to past debates. Can he point to any occasion over the years when the Opposition Front-Bench spokesperson said that the Government were providing too much money to local councils? Can he provide one example of a Conservative MP saying, “My council’s getting too much money in this settlement”?

[Grant Shapps]

The Chairman of the Communities and Local Government Committee is absolutely right: my colleagues and I have been reflecting over the past few weeks, when the representatives of many local authorities throughout the country have been to see us, on what it must have been like to have been in a previous Administration, when one could believe that money was no object—that one could simply get this thing from the money tree and spend it as one wished by giving higher and higher settlements to every authority that came to visit. How wonderful it must have been, but I am afraid that the truth, the reality, has come home to roost, and once again we are left to sort out the mess that Labour has left us with.

Having accepted that there should be some reductions, it was not as if the right hon. Member for Don Valley (Caroline Flint), who shadows the Department, was able to agree with any of the methods that might be used to make reductions without harming front-line services. In fact, she went so far as to ridicule my hon. Friend the Member for Daventry (Chris Heaton-Harris) because he mentioned in an intervention that Hampshire council has just announced that it will cut £7 million next year by cutting the senior management salaries and work force. That was pooh-poohed as impossible. Well, for the sake of clarity, I have managed to get hold of a copy of that detailed information, and my hon. Friend was wrong: it is not £7 million that will be saved by cutting senior management; in fact, it is £7.9 million.

The idea that money cannot be saved or that leadership cannot be shown by example when senior people take a cut, as Ministers in this Government have with a five-year pay freeze, or that that does not have an impact further down the line on the rest of senior and middle management, has been blown apart. The authorities that have taken such steps have found it much easier to sell to the rest of the authority the difficult decisions that have had to be made.

Nor is the right hon. Lady correct when she talks about the £10 billion of reserves. There are £10 billion of reserves for local authorities, as has already been pointed out in an intervention, but the right hon. Lady says that 70% of it has been earmarked, and, in that, she makes a fundamental mistake, which I am surprised about, because she was in this Department when in government. The reality is that “earmarked” is not the same as “spent” or “allocated”. “Earmarked” does not mean that the money cannot be used in the intervening period to ensure that front-loaded reductions, which we have heard a lot about, can be handled in a much better way.

My hon. Friend the Member for Isle of Wight (Mr Turner) raised a serious technical issue that he had already come to ask us to look at again. We did do that, but we could not find in favour of his local authority. However, I say to him and to all other hon. Members that we thought that the concessionary fares mess that had been left by the previous Government required some assistance to sort out between the two tiers of government. I hope that that is helpful.

The Chairman of the Select Committee, the hon. Member for Sheffield South East (Mr Betts), referred particularly to front-loading. As I said to the right hon. Member for Don Valley, it is possible to use earmarked funds that are in the reserves. I invite the hon. Gentleman’s Committee to look at this again, as there seems to be some misunderstanding. I welcome the fact that he welcomes the end of ring-fencing, which had been called for very widely across government and the Local Government Association. Ring-fencing has been un-ring-fenced by some £7 billion, and that has given local authorities a lot more flexibility. We have taken 90 separate budgets and combined them into just 10, meaning that local authorities that are savvy and understand that the situation has changed are able to move much more quickly.

The issue of business rates was raised by the hon. Member for Sheffield South East and others. There is a suggestion out there, which is gaining some credibility, that if business rates were collected at a higher level than the entire local government finance settlement, then the difference could be redistributed somewhere down the line. People need to understand that if business rate collection goes up or down, the amount that goes to local authorities is identical; it makes no difference. The amount that goes to local authorities is set out in the spending review envelope; it is insured by the Treasury, as it were. I hope that that clarifies the situation.

Decent Homes

Debate between Grant Shapps and Clive Betts

Thursday 27th January 2011 Westminster Hall

[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.

Oral Answers to Questions

Debate between Grant Shapps and Clive Betts

Thursday 25th November 2010 Commons Chamber

[Grant Shapps]

My hon. Friend is absolutely right. The Broadway scheme is excellent and innovative. It has taken funding and allowed the people who are involved with homelessness provision and the service users to decide how best to use it. I congratulate Broadway, which has managed to get a lot more done for £794, rather than the average of £3,000. It is an excellent scheme from which others can learn.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister confirm whether now or in the future he plans to reduce homelessness by changing either its definition or the categories of people who are entitled to assistance and re-housing because they are homeless?

[Grant Shapps]

We have no plans whatever to change the categories of reasonable preference—those categories that councils have to take into account in order to state whether somebody is homeless and, therefore, provide statutory help. We have already changed the terms—the measurement—of homelessness as defined by rough sleeping, which, under the hon. Gentleman’s Government, meant that there were only 440 people sleeping rough on the country’s streets. We discovered very quickly, once we had counted such people properly, that there are actually 1,294.

Local Government Financing

Debate between Grant Shapps and Clive Betts

Tuesday 29th June 2010 Commons Chamber

[Grant Shapps]

I am grateful to my hon. Friend, not least because of what happened in the debate on housing here just last week. The Opposition claim to be passionately interested in housing, but there was nobody at all on the Opposition Benches then: not a single Opposition Member turned up for a debate on a subject that they claim to care about so passionately.

Perhaps the answer lies in the figures on housing. We have only to look at the figures for house building last year, for example: fewer homes were built than during any peacetime period since 1924. It is not as if the top-down approach was working; the more the previous Government tried to centralise, dictate and impose housing on local communities, the fewer homes were built. That is why we intend to turn their policy on its head and ensure that in future incentives drive house performance and house building in this country.

[Mr Betts]

rose—

[Grant Shapps]

I give way to the Chair of the Communities and Local Government Committee.

[Mr Betts]

Will the Minister clearly explain what his targets are for the number of social houses that should be built in this country each year? How will the building of such housing be achieved? What policy mechanisms will he use, and where is the funding to deliver the programme?

[Grant Shapps]

I am grateful to the hon. Gentleman. We are not going to set targets because they did not work. [Interruption.] There you go—they have heard it. We all remember the target of 3 million homes by 2020. Remember the former Prime Minister standing at this Dispatch Box and announcing that target? We all remember the 240,000 homes that were to be built every year. What is the figure for house building this year? Probably about 110,000 to 118,000—something in that region. There is no point in announcing targets that do not happen; all that does is bust aspiration. Instead, we will take a practical approach in which communities are encouraged with powerful financial incentives to build homes. Our matching of council tax revenues for a six-year period will achieve a great deal of that.