Housing Market Renewal

Lord Stunell Excerpts

Tuesday 12th July 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

It is a pleasure to serve under your chairmanship for what I think is the first time, Mrs Riordan. I congratulate the hon. Member for Liverpool, Wavertree (Luciana Berger) on bringing this subject to the Chamber. I should perhaps say that my right hon. Friend the Minister for Housing and Local Government recently met the hon. Lady to discuss regeneration in her constituency. He also took the opportunity to visit Merseyside in May to see the work being undertaken in both Liverpool and Sefton. I have also visited Liverpool, so I have seen successful, and perhaps less successful, schemes and their outcomes.

[Luciana Berger]

I just want to reinforce a point that I made earlier. One reason for securing the debate is that while the Housing Minister did come to Liverpool, during a meeting there that was attended by a wide range of people from the local communities affected by the cut to HMR, he said that we in Liverpool could apply for money from the regional growth fund. As that has now been proven to be not the case, further to the evidence given by Lord Heseltine in the Communities and Local Government Committee, it is really important that we receive answers about that today.

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[Andrew Stunell]

I certainly intend to give answers about that.

Perhaps I should say something about the baggage that I bring to the debate. I first secured elected office in 1979, having run a successful local campaign to prevent the wholesale demolition and redevelopment of homes in Chester. I am happy to say that those homes are still there and are now seen as highly marketable assets. We all bring different stories and different perspectives to the debate. I am well aware that good regeneration work has been undertaken in Merseyside and elsewhere, and I am also well aware of the challenges that have been faced in the area. The hon. Member for Liverpool, Wavertree mentioned the Picton and Kensington renewal areas in her constituency.

Several contributors to the debate have acknowledged that not all housing market renewal schemes got off on the right foot. Not all of them were pursued in the right way and, in fact, not all of them were appropriate. A number of them certainly generated significant local controversy and failed to engage properly with local communities. Quite often, the renewal process divided local opinion. Amid the understandable passion that has been brought to the debate, it is important that we keep some perspective on that particular point.

I shall start by responding to some of the specific points that were raised before going on to deal with several of the broader points that I think need to be set out. The hon. Member for Stoke-on-Trent North (Joan Walley) asked for several specific assurances. Officials from my Department are more than ready to work with Stoke-on-Trent council and others on the future direction of the north Staffordshire regeneration area. Indeed, officials are already in discussion on the basis of the bids and applications that have been put in for the £30 million match funding that has been referred to, so I am happy to give her that assurance. I have visited Stoke-on-Trent and looked at some of the situations that she described.

[Joan Walley]

My concern is not just about the transitional fund and securing our share of it, because that is geared towards demolition. I want to see how all the different funding can be aligned so that we can get investment in homes, communities and local regeneration. If the Minister can help with that, I will be very happy to do whatever I can to facilitate it.

[Andrew Stunell]

At the risk of having to issue a correction—I do not have a magic wand—I can say that those discussions will be wide-ranging. Of course, they can be as wide-ranging as Stoke chooses to make them.

I want to move on to something that I am sure the hon. Lady will want the official discussions to cover. She mentioned the link between enterprise zone applications and regeneration. She is absolutely right to say that there should be as much synergy as possible in public investment, or in public stimulation of private investment, in both of those. It is entirely right and proper that discussions range across the boundaries and that we should not put these things in separate silos.

The hon. Lady also asked specifically about the local government resource review and the Government’s announced, albeit not yet detailed, proposals for returning business rates to local authorities. I do know the answer to her question; indeed, it has been given from the Dispatch Box. However, she will have to wait for the detail of that answer for one or two weeks, when we actually publish the proposals—the correct civil service word for that is probably “imminently”. I assure her that neither Stoke-on-Trent nor any other local authority will find themselves at a financial disadvantage in the first year of the operation of the scheme. It is central to the proposals that we are bringing forward that that should be the case.

[Joan Walley]

I realise that time is short, but our concern is not just about being disadvantaged in the first year; it is about the level on which future decisions are made. We could well find ourselves falling severely behind after three years. Will the Minister please feed that back into the final version when he announces it in two week’s time?

[Andrew Stunell]

The hon. Lady’s point is thoroughly understood. I do not think that she will be disappointed, but she is tempting me on to territory on which it really is not right for me to advance.

[Alison Seabeck]

Just for absolute clarity, I would appreciate it if the Minister would clarify something that he said. He stated that authorities would not be disadvantaged in the first year. Given that many of these housing and regeneration projects are much longer programmes, I think that we would all have serious worries if, after the first year, those authorities were disadvantaged as a result of the changes.

[Andrew Stunell]

I was responding to the suggestion that Stoke-on-Trent might lose £26 million. Stoke-on-Trent will not lose £26 million. I think that I have already made our intentions clear. There have been some other statements, but the detail of the scheme will be well debated when it is published, so I think it is best if I go on to respond to several of the other points that were made in the debate, if I may.

It is way over the top for the hon. Member for Hartlepool (Mr Wright) to say that the Government’s decisions have set areas back by decades. That is absolutely not the case. Investments have been made and, even in this debate, reports have been given of their success. It might be said that there is a greater belief in the successes among Opposition Members than Government Members. It is absolutely not the case that such work will be set back as a result of the decisions that have been made.

I want to link that to what the hon. Member for Hyndburn (Graham Jones) brought to the debate. I leave aside his dismissal of deficit reduction, because that sensible Government aim underpins our whole financial strategy. The hon. Member for Hartlepool must be well aware of the deficit problems found by the incoming Government. However, the hon. Member for Hyndburn cannot have his argument both ways: it seemed to be that the fundamental difficulty in east Lancashire was too many homes and not enough people, in which case it can hardly be wrong if the new homes bonus generates more houses in places with more people than it does in places with an excess of houses. I want to tell—

[Graham Jones]

Will the Minister give way?

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[Andrew Stunell]

I might give way in a moment, but not until I have finished my sentence at least.

I want to tell the hon. Gentleman that the £62,000 is the first payment in six years of payments on the homes brought into use in his area in the past year. That will be augmented by the homes brought into use in successive years. That £360,000 is real, additional money that Hyndburn would not otherwise have received. Some local authorities—Sefton metropolitan borough council, for instance—have used the incoming income as an underpinning guarantee to raise loans and finances in order to proceed with regeneration. That was one of the projects that my right hon. Friend the Housing Minister visited in Merseyside a few weeks ago.

[Graham Jones]

I was clear about what I said: if there is an oversupply of houses—more houses than people—there is low demand, and therefore, naturally, less from the new homes bonus. Hence we end up with the figure of £62,000, which is the 11th lowest in the country. The argument is perfectly logical, but it falls down when the Housing Minister says on the Floor of the House that we should not worry about losing housing market renewal because we will get the new homes bonus. That is where the argument falls down; the rest is linear with all the ducks lined up—that is my point. On the Under-Secretary’s mention of extra money, the new homes bonus is being top-sliced from the formula grant after year two, and it is also being taken from the planning delivery grant, so I do not accept his point.

[Andrew Stunell]

First, my right hon. Friend the Housing Minister has certainly not said that regeneration will be funded by the new homes bonus—his point was that it is an important contribution. The example of Sefton shows that local authorities are well able to exploit that and to benefit.

[Jack Dromey]

Clarity on the issue of the regional growth fund is of the highest importance in circumstances in which the Minister for Housing and Local Government has treated the House with contempt by not being here today and by not replying to my letter of 29 June. The Housing Minister has said on the Floor of the House and in a letter to local authorities that the regional growth fund can be accessed for capital projects to support housing growth. However, Lord Heseltine has said that housing renewal is not being addressed through the regional growth fund. He went on to say:

“perhaps any minute now I’ll get a letter”.

Perhaps any minute now we will get an explanation or a letter—or both.

I have a final point to make while I am on my feet. Earlier, following powerful representations from Members of Parliament affected by the cruel cutting short of a visionary programme, the Minister described what they said as “sob stories”. Will he take the opportunity to withdraw what he said?

[Andrew Stunell]

Let us focus on the regional growth fund because time is limited. The spokesperson for the Opposition said that round one of the regional growth fund supported bids in renewal areas in Hull and Wakefield, so it is absolutely not the case that regeneration projects are not being funded by the regional growth fund.

I was not privy to the evidence of Lord Heseltine, but I have seen the reports and heard the quotes, and he said that the terms of reference of the regional growth fund are to promote—funnily enough—growth in the regions. There is no automatic link to housing market regeneration projects although, as hon. Members have mentioned, there are employment, environmental and social benefits to successful regeneration. I take it as clear that the bids accepted from Hull and Wakefield must have met the criteria of supporting growth, as well as the social and environmental criteria about which hon. Members have spoken today.

The bids for round two of the regional growth fund have been submitted and are, no doubt, being evaluated by Lord Heseltine’s advisory committee. The bids are signed off by the Government.

[Jack Dromey]

We need absolute clarity: are we therefore returning to the original position? In the Housing Minister’s letter to the local authorities, he said:

“we will also provide access to a Regional Growth Fund to fund capital projects which could support housing growth”

and housing renewal. Are the Government now saying that the regional growth fund can be used for such purposes?

[Andrew Stunell]

Not only that it can, but that it has. In Hull and Wakefield, it has been used for such purposes. All bids must be evaluated, their strength must be measured and their contribution to growth must be considered. It is therefore not the case that a large slice of the regional growth fund is diverted into social and housing regeneration. However, when social and housing regeneration can contribute to growth, a project will be not only eligible but, as in the cases of Hull and Wakefield, successful.

I will now make some progress—

[Jack Dromey]

Will the Minister give way?

[Andrew Stunell]

No, I will not give way. I have made the point absolutely clear and I am moving on.

On the former renewal programme, the reality of the fiscal deficit means that we have had to take tough decisions about where savings can be made and to ensure that we focus on growth. The previous Government’s programme was far too centrally driven from Whitehall and, by proxy, sometimes too centrally driven from town halls. It included targets for demolition and, in that sense, it was all too literally top-down, as the hon. Member for Stoke-on-Trent North acknowledged. It resulted in imposed schemes that were often resented by local communities and created as many problems as they solved. That approach has not worked, and has often resulted in blighted areas in which large-scale demolition and clearance projects have come to a standstill.

In my last minute, I shall speak about the sum of £30 million, which is to be matched by other funding. Bids have so far been received from all five eligible areas and the indications are that the match funding will be available, thus allowing £60 million to be spent. That £60 million is the assessment of what is needed to get the existing schemes into a shipshape position—viable environmentally and locally—so that the next stage of development in those areas can happen. There is a process, and I can tell the hon. Member for Liverpool, Wavertree that Liverpool city council has submitted a substantial bid. Officials will consider it and, no doubt, will make recommendations to Ministers in due course. We are ensuring that, at the national level, £261 million is available for market renewal in 2010-11, which is a substantial amount. Also, the reason why the five were chosen was not arbitrary, but because of the improvement in those areas—

[Mrs Linda Riordan (in the Chair)]

Order.