Richard Bacon
Main Page: Richard Bacon (Conservative - South Norfolk)Housing and Planning Bill (Seventeenth sitting)
Richard Bacon Excerpts
Mr Thomas
Very wise, Mr Gray; leave it to us and trust our judgment instead. I have not seen anything specific in the Bill that offers improvement regarding the worrying shortage of skilled construction workers. I tabled this probing new clause because it is worth raising the need for more apprenticeships, particularly in the construction sector.
Mr Bacon
The hon. Gentleman is, as usual, ineffably kind, but I wonder why he looks to the Bill for a solution to his problem. Were he to look at the website of the excellent Easton and Otley College in my constituency, he would see that with the opening of its modern, well equipped £3.75 million construction centres, it aims to lay the foundations for a more secure future by trebling the number of construction students. It does not have to be legislation that does it.
Mr Thomas
The hon. Gentleman is right in the sense that legislation is not the answer to everything. Although I am glad to give him the opportunity to praise a provider of apprenticeships in his constituency, I simply make the point, which I am sure he would not try to counter completely, that at the moment we do not have enough skilled workers in the construction industry in this country. All the fine words that we have exchanged over the past four weeks about how we might get more people into their own home are surely put at risk if we cannot find the people to build those homes in the first place.
Mr Jackson
I think Hansard can record “Pot, kettle, black” there. The loquacity of the hon. Member for Harrow West in this Committee is legendary. I defer to no one in my admiration for him.
There is a good reason why there should be consistency in charging across the country. That said, some years ago I had the experience of visiting Medway unitary authority, which had significant numbers of large infrastructure projects that were beyond the capacity of the planning and development control teams in Medway and many other local authorities, and it got some big construction companies to effectively second services to the planning department, so that the services were offered in a non-monetised way. That was a good compromise, which shows that the very best and visionary local planning officers—head of planning, city council, borough councillors and civic leaders—do make the effort to involve their staff with developers and with big regeneration projects.
The Committee will be interested to know that in my own local authority, Peterborough city council, at the planning and environmental protection committee on Tuesday, the Fletton Quays project was agreed with 285 homes, a hotel, shops and restaurants on the south bank of the River Nene. It is a bit naughty, because technically it is in the constituency of my hon. Friend the Member for North West Cambridgeshire (Mr Vara), but I am sure my hon. Friend will forgive me on this occasion for drawing it to the Committee’s attention. However, that was an example of a joint venture partnership between the planning department and the developer, Lucent, and others.
The point is that there are different ways to access money from developers without putting in the Bill a prescriptive way forward.
Mr Bacon
I am listening with great interest to my hon. Friend the Member for Peterborough, who, unlike the hon. Member for Harrow West, has been contributing in a powerful way this afternoon. My hon. Friend mentioned a joint venture between planning departments and others. Does he share my view that the problem is not what is or is not in the Bill, but the lack of innovation and dynamism from some of the planning departments controlled by the sclerotic Opposition?
Hon. Members
Mr Thomas
I beg to move, That the clause be read a Second time.
This new clause seeks to remove the limit on debt where an authority has a housing revenue account. I hope that it will attract the support of the hon. Member for Thirsk and Malton, who rightly reminded the Committee of the 1.4 million households on council waiting lists and the need for urgent action to tackle the scale of housing need those waiting lists represent. Crucially, we need to do more to build homes that those on the waiting lists can afford. Rents have rocketed because of the shortage of supply, as we have discussed, which is another factor necessitating urgent action. Hon. Members will be more than well aware of the particularly acute shortage of housing in London, where, even according to the Mayor of London’s planning documents, we are building only half of the housing we need.
In April 2012, the Government gave councils that own their own housing full control over their stock for the first time, although it was planned under the previous Labour Government. That meant that councils have the right to keep and manage all their rental income. In exchange for that right, councils in London agreed to take on billions of pounds of the nation’s housing debt. One of the benefits of giving councils full control of their own housing stock is that councils can borrow money against their assets to invest in new housing. However, as part of the agreement, the Government sadly imposed a cap on such borrowing. That cap was over and above the Treasury’s normal prudential borrowing rules that apply to most local authority borrowing. That artificial cap effectively halved the potential cash available for councils in London to invest in new homes.
London Councils has estimated that aligning the housing borrowing cap with the Treasury’s prudential borrowing rules—that is the purpose of my new clause—could generate an additional £3.2 billion of sustainable borrowing, which could potentially pay for an additional 54,000 extra affordable homes for Londoners over and above those already planned.
I understand that the reason—or at least the reason that was given in public—for the introduction of that cap was the worry that even prudential borrowing by local authorities might have an impact on the national deficit. But work by Capital Economics was drawn to the attention of the Lyons review, which made clear, from a series of conversations with City interviewers, that the amount of money that is likely to be borrowed would not be sufficient for the markets to worry, irrespective of any changes in accounting methods.
I understand that, on occasion, some flexibility around the cap has been on offer to local authorities. I hope the Minister, if he does not feel that he can support new clause 37 in its entirety, might be willing to look at the possibility of giving further flexibility to local authorities that have clear, sensible and thought-through plans to build additional homes so they can use their borrowing powers.
It is worth pointing out that a number of councils are seeking to get around the existing borrowing cap by setting up additional partnerships with developers and housing companies that are often wholly run by the local authority. Sheffield Housing Company, which will build some 2,300 homes over the next 15 years, is a particularly interesting example. It has had to go down the housing company route in order to get access to finance from the market. Having to go down such a bureaucratic route by setting up a company would not be necessary if there was no borrowing cap, or indeed, if the Ministers showed more flexibility.
Mr Bacon
I do not quite understand what the hon. Gentleman’s problem is with having to set up a company. When I worked in property banking as a young man, I would run five or six annual general meetings for different special purpose vehicle companies before breakfast on one day—literally.