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Housing (Hyndburn)

Volume 202: debated on Tuesday 21 January 1992

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Sackville.]

10.37 pm

Even though it means delaying my hon. Friend the Under-Secretary of State for the Environment on what has already been for him a busy day, I am grateful for the opportunity to raise once again the problem of housing in Hyndburn. It has been the subject of previous debates, of many ministerial visits to Hyndburn and of delegations that I have arranged to meet Ministers at the Department.

The principal housing policy of the Conservative Government, who were elected in 1979, is simply defined: an increase in home ownership. Measured against that simple objective, the policy has exceeded beyond all expectations. Home ownership has increased from 55 per cent. in 1979 to 67 per cent. in 1990.

The people of Hyndburn did not need the encouragement offered by the new Conservative Government in 1979 to buy their own homes. They realised many years earlier that home ownership was a good thing. A high level of home ownership had already been achieved due to the self-restraint and independent nature of the people there, and the way in which, over the years, they resisted the onslaught of municipal socialism in housing.

Eighty-one per cent. of people in Hyndburn own their own homes, and therein lies its problem. The Government successfully concentrated on providing effective policies to promote new owner-occupation but, perhaps undertandably, they did not pay sufficient attention to the problems of areas such as Hyndburn, where a high level of owner-occupation had already been achieved.

Important though policies such as the sale of council houses, various low-cost ownership schemes, and the removal of constraints on private builders are in a national context, they are of only minor relevance in Hyndburn. With home ownership there at 81 per cent.—it has been approaching that figure for many years—it will be obvious that a substantial number of owner-occupiers are in the lower income groups.

Hyndburn is a low-wage area, even by comparison with other parts of Lancashire—let alone the rest of the country. Consequently, although owner-occupiers have made their mortgage payments over the years, they had nothing left to pay for major repairs or improvements. That combination of a high percentage of home ownership and low wages makes Hyndburn a special case.

In addition, a high proportion of houses in Hyndburn are far from soundly constructed. The majority were built in Victorian times to provide homes for workers in neighbouring cotton mills. Although Hyndburn's stone-built terraces were in some ways more soundly constructed than much modern, system-built housing, they were erected at such a frenetic pace—to cope with the enormous growth of industry—that many corners were cut.

In particular, insufficient care was taken to provide those properties with secure foundations, in an area notorious for its difficult ground conditions. The legacy is a private-sector housing stock that is now fast deteriorating and in need of massive investment in terms of repairs or replacement.

It is a depressing thought that, despite years of economic prosperity and high employment in the borough, about 7,000 of its houses—approaching one quarter of the total, and nearly all of them in the private sector—are officially designated as unfit for habitation, or fit but lacking basic amenities.

My concern is that those factors—a high percentage of owner-occupation, a history of low earnings, and a poorly constructed housing stock—are not sufficiently taken into account when resources are allocated. It is clear that a high percentage of Hyndburn's housing is coming to the end of its useful life, and that major investment is needed if wholesale demolition in the not-too-distant future is to be avoided.

It is not too late. The houses in question could be saved and be improved by imaginative schemes, such as the Quadrangle—a Bradford and Northern housing association scheme in Oswaldtwistle. Alternatively, they could be left to deteriorate even further, so that, in a few years, they will be beyond repair or improvement.

It is much cheaper to improve existing housing stock than to demolish it and rebuild. Such a policy allows people to remain owner-occupiers, rather than become tenants. However, unless some way is found of providing additional resources to help Hyndburn, it will be 30 years before every owner-occupier household there can enjoy basic amenities in a property free from major defects—even on the unreasonable assumption that there will be no further deterioration meantime, and no improvements to basic standards. The average terraced property would reach its 130th year before being brought up to an adequate standard.

I do not want to give the impression that it is all doom and gloom. Far from it. In 1979, Hyndburn borough council spent only £300,000 a year on improvement grants. Under a Conservative Government, £2 million a year was spent. In addition, because Hyndburn's problems were recognised by my right hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) when he was Minister for Housing, Hyndburn was one of the first areas to benefit from the Government's estate action programme.

Generally speaking, there has been all-party support for the housing initiatives that have been undertaken; so it was particularly unfortunate that, when the Housing Minister invited the housing chairman, Councillor Mrs. Betty Court, to London to discuss Hyndburn's housing problems, the controlling Labour group—which included Labour's current parliamentary candidate—voted, to its shame, against allowing her to come.

Those who know Mrs. Court will realise that it would take more than a silly party political decision to deter her from doing all that she could to improve Hyndburn's housing; she came at her own expense. We saw the Minister together, and as a result £1 million was spent on Huncoat, one of our most rundown estates at the time. That money came from the estate action programme. Since then, we have benefited greatly from the same programme in Fern Gore, Spring Hill and Clayton le Moors.

That is good news for many council tenants, but there is still much to be done—not least on the Trinity street estate in Oswaldtwistle, and in other areas of the borough where estates are in need of urgent action if the accommodation is to be of reasonable standard. Despite the considerable capital investment of recent years, there are still many council houses with serious defects and a lack of amenities.

We benefited, too, when—after intense pressure from many of us—the Government decided to extend the neighbourhood revitalisation services scheme. I was very pleased when Hyndburn was one of the areas to benefit. The scheme's contribution to the improvement of houses in the east Accrington area has been invaluable. Housing associations have also played an increasingly important part in the provision of much-needed accommodation for our growing number of elderly people. Schemes totalling over £3.5 million are in this year's programme.

Over the past 10 years, the council has dealt with the very worst housing, but we are now left with a great mass of properties built within a couple of decades. Inroads into the problem have been made, mainly in the areas that have been targeted for housing action area activity. A series of housing action areas, and a couple of general improvement areas, have represented the main thrust of the council's improvement activities since 1980. There remains, however, an enormous and urgent problem.

The council's housing capital programme has been reduced from a peak of £6,676,000 in 1989–90 to £4,306,000 in 1991–92, with a similar figure likely this year. That reduction has unfortunately coincided with an increased demand for mandatory renovation grant expenditure—mainly owing to the introduction of the Local Government and Housing Act 1989, whose provisions I welcome but which has caused further problems for the borough. For example, the original programme expenditure on renovation grants in 1990–91 was £1,420,000. To meet the demand for the new mandatory payments, that had to be increased to £2.3 million.

To accommodate the increased expenditure on renovation grants, expenditure in other areas, especially repairs and improvements to council stock, was severely curtailed. Two contracts for the completion of estate action schemes were postponed from the 1990–91 programme, and could not even be proceeded with in 1991–92. That, I feel, is particularly unfortunate.

The Department of the Environment was advised of the council's dilemma, and encouraged the council to bid for a supplementary credit approval. In the event, the application was not approved. That resulted in an overspend of £520,000 in 1990–91, which the council covered by using the provisions of section 65 of the 1989 Act.

If the council was to meet its statutory duties to approve mandatory grants within six months, it would have been impossible for it to redeem the overspend from the 1991–92 programme, and it would therefore have had to roll it forward. As a consequence, I arranged a meeting with my hon. Friend the Member for Ealing, Acton (Sir G. Young), which took place on 8 May.

In addition to making a request for supplementary credit approval of £520,000 to deal with the 1990–91 overspend and an SCA of £1 million in 1991–92 to handle the legal duties of the council in respect of the urban renewal legislation programme, we also requested a supplementary credit approval of £300,000 to allow a clearance-rebuild partnership with Wimpey Homes, through an imaginative scheme, to harness housing compensation for investment in new housing provision.

As the Minister will be aware, the aspiration of many owner-occupiers is to maintain their tenure. The scheme that we outlined sought to achieve just that, in an area where there is a gap that otherwise cannot be filled between the compensation resulting from clearance and the price of a new house.

The Secretary of State visited Hyndburn on 18 June and said that he was greatly impressed by the co-operation between Hyndburn borough council and Wimpey Homes. The result of that meeting on 8 May was an SCA of £900,000—clearly short of the amount requested, but welcome nevertheless. The scheme devised by Wimpey Homes is now going ahead under the title "resale covenant scheme". That, too, is welcome news.

In this short debate, I have sought to demonstrate that we have the needs and ideas for dealing with them but that we do not have the resources to enable us to do so. I want those people who have been waiting for a considerable time for grants to improve their properties—many of whom I have visited in their homes, where I saw the conditions for myself—to be able to obtain grants quickly. If they cannot, and if there is not an even greater increase in resources than we have had in the past, we shall be struggling in Hyndhurn not to increase home ownership, which is in line with Government policy, but to maintain it at its present level.

I understand that, once again, a sum has been set aside by the Department for SCAs. I urge the Minister to ensure both that Hyndburn receives a substantial part of that sum and that our bid for estate action resources for the Trinity street estate in Oswaldtwistle leads to money being made available.

10.51 pm

I congratulate my hon. Friend the Member for Hyndburn (Mr. Hargreaves) on raising this extremely important issue and I pay tribute to him for his vigorous and consistent advocacy on behalf of his constituents. He has played an important part in securing for Hyndburn sympathetic treatment of its housing problems over the years. He referred to his meeting with my hon. Friend the Minister for Housing and Planning on this issue.

It is gratifying to hear that Hyndburn has made good use of its past allocations of housing investment programme resources and that particular benefit has been derived over a number of years from targeted estate action money. The upgrading of rundown council estates, coupled with management improvements and proposals for the diversification of housing tenure that have been developed in consultation with tenants, the local community and the private sector, remains a very important element of the Government's housing policy.

It may be helpful if I set the debate in context. It was in response to a question from my hon. Friend on 6 December 1991 that the Secretary of State announced the Government's decisions on the allocation of housing resources for 1992–93. I understand my hon. Friend's concerns on this score, but I must point out to him that the total resources are very substantial. Gross expenditure by the Housing Corporation in supporting housing associations—now the principal provider of new social housing—will be £1.77 billion in 1992–93. That will allow more than 50,000 new houses to be approved next year—25 per cent. more than the current year and four times more than in 1990-91. In addition, £1.7 billion has been allocated to local authorities in the form of housing investment programme allocations for 1992–93. Of that sum, £1.3 billion was in the form of general purpose allocations. The balance of £400 million has been allocated in the form of specified capital grant for private sector renewal to assist councils in their grant aid to private owners and in their expenditure on renewal areas.

The sum of £364 million—an increase of a third over the current year—will be allocated next year to maintaining the commitment to tackling the most difficult estates under the estate action programme. An additional £215 million has been set aside for spending on housing action trusts over the next three years. That is sufficient for the housing action trusts that have been established in Waltham Forest and Hull and for four additional housing action trusts that we hope will be created in other areas.

Historically, housing resources have been distributed to regions by means of the generalised needs index, a series of indicators measuring relative housing need. In 1991–92 both annual capital guidelines and specified capital grants were distributed to regions by means of the GNI; and within regions to local authorities on the basis of 50 per cent. by GNI with the other 50 per cent.—a discretionary element—allocated by Ministers on the recommendation of regional housing controllers.

We have, however, been concerned for some time about the undue emphasis placed on formulae in distributing housing resources. The almost automatic receipt of resources by an authority regardless of its performance has done little or nothing to encourage greater efficiency and effectiveness in capital investment or in protecting that investment through improved management. Nor does it deliver the quality of service that tenants seek and deserve.

For 1992–93—next year—we concluded that we should move to a system under which good performance was rewarded through higher allocations, and clear incentives were held out for all authorities to raise their standards to the level of the best. In the current bidding round, therefore, authorities competed for a 60 per cent. share of annual capital guideline resources while 60 per cent. of specified capital grant was distributed largely on the basis of local authorities, actual performance as demonstrated by expenditure patterns.

I am aware—and my hon. Friend mentioned this in his speech—that there is disappointment in Hyndburn about the level of the borough council's housing investment programme allocation for 1992. A total allocation of £4.156 million—which is made up of an ACG of £2.406 million and resources for specified capital grant of £1.75 million—represents a 3 per cent. increase over the current year's £4.029 million. In relative terms, Hyndburn has fared better than most authorities in its region.

I know that there is particular disappointment that the Department did not agree to fund Hyndburn's three bids for new estate action schemes next year. The allocation does, however, include provision of £1.4 million to enable the ongoing projects at Fern Gore and Spring Hill to continue. Refusal to fund the new bids is a reflection not of the quality of the schemes submitted but of the success of the estate action programme generally. There is now immense competition for what are inevitably finite resources and many more schemes have been submitted than there were resources to distribute. It is true—this is good news for the tenants for whom all this is being done—that the quality of the schemes coming forward is higher than ever before.

One of the important features of the estate action programme is the requirement for local authorities, wherever possible, to make contributions to the schemes matching those provided by the Government. That demonstrates a clear local commitment to turning round their problem estates and enables total resources committed to improving the worst estates to be "stretched" further. In Hyndburn's case we were conscious of the fact that the local authority is already working hard to make its contribution to ongoing schemes and that approval of new schemes in 1992–93 might have faced the authority with commitments it could not reasonably meet in that financial year. The regional controller for the Department has already suggested to the council that its priority should be satisfactorily to complete the schemes already embarked on before moving on to fresh ones.

My hon. Friend acknowledged—I welcome it—that Hyndburn has benefited greatly from estate action. He also referred to Mrs. Betty Court, a former chairman of housing for the council. I am glad to acknowledge the excellent work that she did during her time as chairman.

The statistics for Hyndburn tell an interesting story. Since the inception of the estate action programme in 1985 Hyndburn has received estate action resources totalling almost £10 million which has enabled almost 2,000 houses on no fewer that seven estates to be improved. That represents nearly half of Hyndburn council's housing stock of 4.179 dwellings. I know that there have been notable successes amongst the schemes that have been carried out, and I believe that that augurs well for the future. It bears repeating that the priority must be the successful completion of the current schemes.

Hyndburn has a well-earned reputation for "enabling" the private sector and housing associations to play their part in providing accommodation. I am aware of the problems of affordability in the borough and the considerable thought that has been given in particular to helping local people whose properties are the subject of clearance to stay in owner-occupation by seeking innovative schemes to help them to bridge the equity gap between the compensation from their old house and the cost of a new one.

As my hon. Friend acknowledged, housing associations continue to fulfil a central role in the borough in the provision of new rented and special needs housing. In the three years to 1990–91, £7.6 million of provision received project approval from the Housing Corporation, producing 233 new dwellings. Over the next three years, between £6.1 million and £8.2 million will be spent in the authority's area by housing associations on housing for sale and for rent.

I was not surprised that my hon. Friend referred at length to the particular difficulties in the private sector, not least in relation to the expenditure on mandatory renovation grants. As he said, there is a long tradition of owner-occupation in north-east Lancashire. A very high proportion—85 per cent.—of houses in Hyndburn are privately owned, which is way above the regional and national average. Again, statistics are important: 65 per cent. of the stock was built prior to 1919, much of it with specifications inadequate by today's standards; 27 per cent. of the stock—7,500 dwellings—is unfit; and 30 per cent.—8,500 dwellings—needs substantial repair work. These problems are, of course, compounded by the relatively low incomes which often limit the ability of residents to invest in their property. My hon. Friend has made those points to us on several occasions.

Hyndburn is to be commended for the energy and effort that it has put into getting to grips with private sector problems. The declaration of the east Accrington renewal area facilitates a strategic and comprehensive approach to deal with the problems of the area, and I know that progress is also being made towards a renewal area declaration in west Accrington. Renewal areas encourage the development of corporate, comprehensive strategies for identified areas and, by focusing resources and efforts in that way rather than merely responding to unprompted demands, provide a sound basis for progress in regenerating those areas.

Some of Hyndburn's stock is beyond economic repair and it would be a waste of resources to seek to prop up houses which have no long-term future. It is perfectly proper for Hyndburn to use its specified capital grant allocation to pursue clearance and I know that this is an issue which my regional controller has recently discussed with the borough council.

I understand the concerns expressed about the difficulties of coping with levels of mandatory renovation grant applications. Hyndburn's problems are not untypical of other districts and towns in the north-west where there is a preponderance of older, run-down housing occupied in the main by poor people. Inevitably, until the new system introduced by the Local Government and Housing Act 1989 shakes down, it will remain difficult to predict with certainty just what the likely demands for resources will be.

In the current year, the distribution of specified capital resources by the generalised needs index led to some anomalies. As security against demand exceeded resources in some areas, we purposely set aside a special allocation of supplementary credit approvals totalling £25 million—my hon. Friend referred to it—to cater for that eventuality. After the points made by my hon. Friend last year, Hyndburn was a major beneficiary, receiving a supplementary credit approval of £904,000.

Before reaching decisions on how specified capital grant resources should be distributed from the centre for 1992–93, we looked closely at the pattern of needs for resources to deal with problems of private sector stock condition and the actual spend performance of regions and individual authorities on renovation grants. A clear picture has emerged of where stock conditions were most serious and where resources to tackle those problems were inadequate. We therefore decided upon a distribution methodology which allocated resources to regions on the basis of the total number of statutorily unfit properties identified. This established a much clearer link between actual problems on the ground and the likely need for resources to tackle them.

Within regions, as I have mentioned, 40 per cent. of resources were allocated to local authorities on the basis of need as identified by the number of unfit properties and 60 per cent. mainly on the basis of actual performance as determined, in the main, by local authorities' spending patterns. I am sure that my hon. Friend will agree that there is a clear logic to having a system which not only recognises need but pays particular attention to a local authority's track record and its ability to deliver.

As we had expected, the new approach favours regions like the north-west with its higher proportion of pre-1919 owner-occupied dwellings—a legacy of its industrial heyday. In fact, in 1992–93 a total SCG of £52.9 million has been allocated to the north-west region as compared with £45.2 million in the current year—a 17 per cent. increase. Significantly, the new figure closely matches the likely regional outturn for the current year and will therefore, I hope, go some way towards mitigating the mismatch between demand and resources which became evident in the current year.

Hyndburn's SCG for 1992–93 of £1.7 million is 19 per cent. more than this year's £1.47 million. Coupled with the supplementary credit approval of £904,000 already received, it should provide a sound basis for continuing progress to be made in renewing the borough's urban fabric. I appreciate that, in common with other authorities, Hyndburn would like a larger allocation.

What is often not fully appreciated is that the new finance system set up by the 1989 Act gives local authorities flexibility to meet demand for grant expenditure. The allowance an authority receives for renovation and other specified capital grants in its housing investment programme is not a ceiling. The council can spend if it needs to by using its other resources. As an added safeguard against unforeseen demands for mandatory grants, we have again set aside a reserve of supplementary credit approvals—this time £30 million—for use in circumstances where an authority considers that its basic credit approval will be insufficient to meet demand for housing specified capital grant in any single year. Of course, as in the current year, any such application would have to be considered on its merits, and a particular consideration would be evidence that the level of mandatory grants actually approved by the authority was high in relation to the resources available. Authorities will again be invited to submit bids for SCAs during the course of 1992-93. Therefore, an authority such as Hyndburn, which has been through the process once before, should look to the coming year with confidence that, in addition to the allocation that has been made, it will have an opportunity to bid for additional resources if it appears that demand has heavily outstripped supply. I hope that my reassurance is of help to my hon. Friend.

In conclusion, I think it can be said that Hyndburn has come out of the 1992 housing investment programme round well, with a higher resource allocation than that for the current year. There remains scope in all authorities to improve the management of capital programmes and housing stock, introduce new management practices, work more closely with the local community and fully to engage the housing associations and private sector as a means of making resources go further and securing better value for money. Resources for housing are already very substantial but they are finite. Local authorities should temper their plans with realism. Increased efficiency rather than ever-growing allocations points the way forward; and the new system of competitive HIPs that we have introduced provides a basis for rewarding those authorities who most clearly demonstrate their effectiveness.

I am most grateful to my hon. Friend for bringing the position in Hyndburn to the attention of the House this evening.

Question put and agreed to.

Adjourned accordingly at seven minutes past Eleven o'clock.