Council and Social Housing

John Leech Excerpts

Tuesday 6th March 2012 Westminster Hall

[Heidi Alexander]

I can confirm that in the last five years of the Labour Government, 256,000 affordable homes were built. [Interruption.] I obviously heard the hon. Gentleman when he asked me about council housing and I have said previously that if properties are genuinely affordable, I do not have a problem with whether they are council houses or housing association properties. He talks about the purpose of this debate. My reason for coming to the debate was to scrutinise the policies of the current Government, who I believe are failing. I am sorry if the hon. Gentleman does not welcome my tone, but it is important to put these things on the record.

Let us look at the facts of what the Government have done over the past two years. The national affordable house building programme has been cut by 63%, and there is £4 billion less to spend on new affordable homes between now and 2015 than there was between 2008 and 2011, when we spent £8.5 billion. Some 259 new social rented homes were started across the whole country between April and September last year—a 99% fall on the same period the previous year. In London, a city of 7 million people, just 56 new social rented homes were begun in the same period, which represents 8,469 fewer social rented home starts between April and September last year than in the preceding six months. That is not the record of a Government who are committed to building the homes this country needs; it is the record of a Government who are failing.

In the past few weeks, I asked a major housing association in London to provide me with figures on the number of social rented homes it has built over the past three years and what it plans to build over the next three. Its response was illuminating. Although it has averaged an annual output of more than 1,000 social rented homes—homes that have been built new—in recent years, that figure will halve in the next three years. Those projections are borne out by the amount of social housing that has been granted planning permission since the Government came to power. Last week, Inside Housing reported that the amount of social housing that was granted planning permission in 2011 was virtually half that which had been granted permission the year before. If planning permissions are not granted, the homes will not be built—it is simple.

I also question the affordability of any homes that housing associations or councils do build in the next few years, and my hon. Friend the Member for Great Grimsby (Austin Mitchell) also picked up on this issue. The Government have their strangely named affordable rent model, which allows social landlords to charge up to 80% of market rents, thereby bringing in more money to cover the costs they laid out in construction. The problem is that, in some parts of the country, the rents, which are just 20% lower than market rents, will be anything but affordable. If people in receipt of housing benefit move into those properties, will we not just be adding to the housing benefit bill again? I could be wrong, but I thought that was precisely what the Government were trying to avoid.

The supply of social housing is a function of not only what is built, but what happens to existing homes in the sector. Debates about allocation policies are all well and good, but if there is simply not enough social housing out there to meet the population’s needs, we will just be working out how to cut up the cake, knowing there will never be enough to go round.

On the overall amount of housing available at rents that people can afford, the Government’s enhanced right-to-buy proposals are particularly worrying. Like my hon. Friend, I agree with the principle of a right to buy, but when there is such a shortage of council housing, it seems crazy to deplete the overall stock of socially rented homes. The Government will argue that, for every home sold, another will be built, but I do not see how the finances stack up. Research by Hometrack in December 2011 showed that, where a £50,000 discount is applied, the average receipt from a sale would be £65,000, which would be lower than the cost of delivering a new property. That leaves aside the issue of whether the replacement works on a like-for-like basis. Will a two-bedroom flat sold under the right to buy in London be replaced by the same sort of property in a similar location?

[Mr John Leech (Manchester, Withington) (LD)]

On that point, two-bedroom flats sold off in London should be replaced by larger properties to deal with the shortage of such properties in London. In the same way, there is a shortage of smaller properties in other parts of the country.

[Heidi Alexander]

I do not necessarily disagree with the hon. Gentleman, but building a larger property will probably cost more. There are real questions about how we get to a situation where we have the right sorts of properties in the right places. I just cannot see how an enhanced right-to-buy scheme will help to get people into homes at a price they can afford.

I have painted quite a bleak picture, but there are things the Government could and should be doing. They should level the playing field between councils and housing associations in respect of how they borrow money to invest in social housing. If we remove the cap on the borrowing that local authorities can invest, more money might go into new social rented housing. The Government should also be clear in the national planning policy framework that social rented housing is a priority, instead of leaving it to the whim of local authorities, as the current draft does. They should be clear and robust in their planning policy document.

Since the Government came to power, we have heard plenty from the Housing Minister, including lots of different initiatives and gimmicks. I have listened carefully to those announcements, waiting to hear something that will give hope to my constituents—the people I spoke about at the start of my contribution. To be honest, however, I have heard nothing in what the Government have said that will give them hope. We need a dramatic increase in the number of social rented homes being built, but nothing the Government are doing will bring that about.

[Mr John Leech (Manchester, Withington) (LD)]

I am pleased to speak under your chairmanship for the first time, Ms Clark. I, too, congratulate the hon. Member for Great Grimsby (Austin Mitchell) on securing the debate.

The contribution of the hon. Member for Lewisham East (Heidi Alexander) was somewhat unfair on the Government. I would just point her in the direction of the comments made by my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), who noted the massive under-investment in social housing during the years of the previous Labour Government, when the economy was doing well. Throughout the previous Parliament, I, along with colleagues not only in the Liberal Democrats but across the House, argued for substantially more investment in social housing. Indeed, my hon. Friend the Member for Colchester (Sir Bob Russell) was arguing for that from 1997.

[Heidi Alexander]

One thing the previous Labour Government had to deal with when they came into office was the £19 billion backlog in repairs and maintenance investment in public housing, but they brought 1.5 million homes up to the decent homes standard. Does the hon. Gentleman not accept that that represented an incredible amount of investment in social housing, albeit it did not contribute to the number of new homes?

[Mr Leech]

I thank the hon. Lady for that intervention. I will not stand here and defend the ills of the Conservative Government pre-1997. However, the previous Labour Government could have done more at a time when the economy was doing well. As my right hon. Friend the Member for Bermondsey and Old Southwark said, the coalition Government have come to office at a time when there is not a lot of cash available.

Although I welcome the additional social housing that will be built over the next three to four years, I emphasise to my hon. Friend the Minister that we need to do more. I point him in the direction of the Department for Transport, where there has been significant capital investment in railway schemes at a time of significant budget cuts. Some capital investment in social housing schemes would be yet another way of helping to boost the construction industry and to deal with the massive shortage of social housing.

Governments cannot, however, be expected to do everything. Local authorities must play their part, and I want to make a few brief comments about that. My hon. Friend the Minister is aware of my concern about the changes to housing benefit regulations, and the prospect of tenants who under-occupy homes in my constituency losing housing benefit unless they choose to move to smaller properties. That policy has been widely criticised by housing associations and local authorities, including my own in Manchester, because of a lack of available smaller properties for tenants to move into. The hon. Member for Lewisham East mentioned a massive shortage of larger homes in London, but the problem in other parts of the country—certainly in Manchester, but also in other areas of the north of England—is a shortage of smaller properties for people to move into.

Manchester city council criticised that change in housing benefit regulations, but when it was given the opportunity to help to provide some additional, smaller social housing accommodation, it chose not to do so. Many local authorities—although London is an exception—have available land, which has been earmarked for housing development, and my constituency is no exception to that. In Chorlton, the former Oakwood high school site on Darley avenue has been earmarked for housing. However, Manchester city council says that there is already plenty of social housing in the area, so there is no need for more. It says so despite having argued that there are not enough available properties to allow under-occupying tenants to move to smaller accommodation. That seems to be a bit of a contradiction.

The council also argues that some homes will, by definition, be affordable, because some property will be available to buy on a shared ownership scheme. That is certainly true—and welcome—for people who are able to get on the housing ladder, but the harsh reality is that many people cannot get a mortgage in any circumstances; therefore, by definition, those homes are unaffordable for those people.

I return, therefore, to the point I made at the beginning, about local authorities taking on some of the responsibility. It cannot just be left to the Government to throw billions of pounds at housing development. Local authorities need to make land available—where they have it, because I recognise that some do not—for social housing.