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Remaining Private Members' Bills

Volume 405: debated on Friday 16 May 2003

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Government Powers (Limitations) Bill

Order for Second Reading read.

To be read a Second time on Friday 13 June.

Equality Bill Lords

Order for Second Reading read.

To be read a Second time on Friday 20 June.

Council Tenants (Hammersmith And Fulham)

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

2.30 pm

I am pleased to have secured today's Adjournment debate to highlight an issue of great interest to many thousands of council tenants and leaseholders in my constituency. It relates to the publication of a report entitled, "Our Community—Our Homes—Our Choice", the launch of which I was delighted to host in the House of Commons on 8 April this year.

The report was produced by the Hammersmith and Fulham housing commission, which the council established in October 2002 to hold an independent inquiry into the future of the 14,000 council homes in the borough, including how best to achieve the decent housing standard. The commission, which comprises 19 tenants, one leaseholder, one councillor and an independent chair, has been a remarkable experiment in tenant participation. I am delighted that many commissioners are present to hear the debate.

Commissioners underwent intense training and spent an estimated 1,500 person hours between them gathering evidence, commissioning independent financial and legal advice, cross-examining in Select Committee style and agreeing their report. The commission studied in great detail. It considered comprehensive financial appraisals of the three main options for the future management of their homes. They were: retention under democratic management; an arm's-length management organisation, known as an ALMO; and a large-scale voluntary transfer and mix-and-match solution—LSVT.

Two important pieces of information are crucial to understanding the context of the commissioners' deliberations. First, Hammersmith and Fulham council's housing management and caretaking service has received the top Audit Commission award of three stars with excellent prospects for improvement. Only one other of the 32 London boroughs received the same award. Secondly, the council and its tenants have worked in partnership for many years to build a comprehensive management service and highly effective tenant participation arrangements.

After six months of consideration, the housing commission was unanimous in all its recommendations. The first, strongly held preference is retention under the direct management and democratic control of the local authority. I shall outline the principal reasons for that decision. First, the local authority provides an excellent service to tenants, as the independent award of the three stars for the caretaking and housing management service recognised. I repeat that that is the highest possible accolade for the service. Secondly, there is a clear, coherent and agreed plan and policy in place to achieve the decent housing standard, subject only to the availability of the necessary resources. Thirdly, it is the commission's clear view that the uncertainty and disruption of an unpopular and unnecessary change will inevitably undermine current focus on service improvement.

The tenants' view was not based on a dogmatic or doctrinal position. There have been direct and indirect stock transfers in Hammersmith and Fulham in recent years. However, despite constant Government soundbites and spin that tenant participation should be the key driving force behind policy, they will not allow tenants to follow that option, which the commission clearly and unanimously selected.

It appears, and this has been confirmed in a letter from Lord Rooker, the Minister for Housing, Planning and Regeneration, dated 8 May to the independent chair of the commission, that the Government have decided that councils keeping their stock without making use of an ALMO, LSVT or private finance initiative option will not receive any additional resources to allow them to meet the Government's own decent housing standards. Indeed, any council that cannot produce a plan showing how it will achieve that standard will be deemed to be failing.

Without those additional resources, it will be necessary to make cuts of 25 per cent. in service to provide enough spare revenue to finance borrowing for the investment required. In practice, therefore, the Government are in my view blackmailing the council and the tenants to go down a route of change in the management of their homes that I am convinced they do not wish to undertake.

So why did the commission reject the other options that were available? The housing commission argues that by far the least worst of the other options available to tenants, other than staying with the council as they wish, is to agree to set up an arm's-length management organisation—an ALMO. Although it is the clear view of the tenants that they will lose some democratic accountability, run the risk of unnecessary disruption to the high quality of service that they get, and spend money unnecessarily in setting up the machinery of an ALMO, it will still allow them to attract the necessary investment to meet the decent housing standards keep their homes in the ownership of the council, and preserve as far as possible the close relationship with the council and its wider strategic functions.

If, as it seems from Lord Rooker's most recent letter, the Government are not prepared to listen to the representations of the tenants, the ALMO is the commission's preferred option. The tenants rejected out of hand the option of a large-scale voluntary transfer, not least because it was their clear judgment, as experienced tenant representatives living locally for many years, that there was no prospect that their fellow tenants in Hammersmith and Fulham would vote for one in the ballot that is currently required by legislation.

The tenants believe that the set-up costs for an LSVT would be unacceptably high. They also recognise that new tenants would be granted an assured tenancy, not a secure tenancy, and that an LSVT would place a barrier between tenants and the council's renewal and regeneration strategy.

I had the privilege of giving oral evidence to the commission, as did 20 other witnesses. Tenants failed to understand why the Labour party, which the overwhelming majority of them have supported loyally in good times and in bad times, is treating them in such a fashion. Many of them feel betrayed and do not understand the reasoning behind the Government's policy and actions.

In their communities plan published in February 2003, the Government proposed new and bold policies for housing, especially in and around London. The plan set out the increased financial incentives—or bribes, as several commissioners have described them to me—for going down particular routes of housing management. In paragraph 1.3 of that document, the Government state:
"tenants must be at the heart of plans at all stages in the process, starting with drawing up options for investment".
In paragraph 1.5 they go on to state that authorities that do not use the option of the private finance initiative, LSVT or ALMOs cannot expect any increased investment in the stock above that from the housing investment programme. Commissioners believe that the policy set out in the communities plan is irrational and discriminatory.

The housing commission report points out that there are a number of reasons why the logic of the Government's own policy should allow tenants a genuine choice based on local factors where there is clear evidence of a high-performing council. The Government are constantly declaring their pragmatic approach to the provision of public services, characterised by the saying, "What matters is what works", yet in Hammersmith and Fulham it is beyond dispute that the current democratic arrangement for the provision of the management of council housing works well.

The Government constantly reiterate their policy of rewarding good performance. Through democratic management, Hammersmith and Fulham has achieved the highest possible standard, as evidenced by its being awarded the highest score in the country in its comprehensive performance assessment, as judged by the Audit Commission, an independent body.

No authority in the UK is better placed to decide for itself, having consulted its customers, whether to retain its housing stock under direct management or to go for an alternative option. However, the Government are, in effect, telling the council and the tenants of Hammersmith and Fulham, "It does not matter about your record on the quality of your service provision. It does not matter what local people want to happen to their homes and their communities. You will go down the route that we dictate or you will lose subsidy. If you lose that subsidy, you will not meet the standards for decent housing, and if you do not meet those standards you will be deemed a failing authority, with all the implications of that assessment."

In his 8 May letter to the independent chair of the Hammersmith and Fulham commission to which I referred earlier, Lord Rooker said that he was pleased that the commission had conducted an appraisal of the options available for the long-term future of council housing stock in Hammersmith and Fulham. He also said that he was pleased that there had been high tenant involvement in the process. However, Lord Rooker went on to say that he did not think that the meeting with him that the housing commission had respectfully requested would be helpful, as the Government were not prepared to consider any exception to the blanket policy set out in their communities plan.

Lord Rooker's refusal to consider the option unanimously agreed by the 19 tenants and leaseholders in the report and, indeed, his refusal even to meet a delegation from the commission came as a shock and confirmed the worst fears of the members of the commission. Local people undertook a huge exercise, in terms of time and commitment. They gave up their time freely and, as I said earlier, an estimated 1,500 person hours have been ignored by the Government. I should like to take this opportunity to thank all the members of the commission and to congratulate them on their hard work and commitment.

Even at this late stage, I ask the Government to think again and to agree to reconsider their position, based on the excellent report that has been produced by the housing commission.

On 3 July 2002, in a speech to the annual conference of the Local Government Association, the Deputy Prime Minister said:
"The most important performance assessment is, as we know, at the ballot box. The judgment of those we serve is the ultimate test for all of us."
I agree with those sentiments. I fear the consequences for my party at the ballot box if the Government fail to take seriously the clear and stated views of local people, especially when the matter involves one of their most precious assets—their homes.

Local people in Hammersmith and Fulham will not easily forget or forgive the manner in which they have been treated on this occasion. It must surely be right that the voice of the local community, so coherently expressed in this excellent report, should be listened to and respected, so I await with interest the response of the Minister.

2.43 pm

The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister
(Mr. Tony McNulty)

I am grateful to my hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) for this opportunity to discuss the important issue of council housing, which is of great significance, not only to his constituents but to all social sector tenants in the country.

At the heart of the issue is the Government's determination to deliver major improvements in the quality of life of tenants throughout the country. I am sure that all hon. Members agree that there is a clear need to transform homes and communities blighted by years of neglect.

Of course, the challenges vary across the country. My hon. Friend represents the fourth smallest inner-London borough in terms of both area and population, but the fourth highest in terms of population density. I know that he represents his constituency assiduously and is one of the most hard-working and dedicated constituency MPs.

Much of the borough's housing stock was built in the 19th century and needs extensive repair. Like many inner-London boroughs, the larger, older council estates suffer from poor environments that exacerbate the social and economic problems of those who live there. The local authority owns just over 14,000 dwellings. A further 11,600 are owned by registered social landlords, and another 49,000 are privately owned, of which more than 31,000 are owner-occupied. More than 5,000 council homes were classified as non-decent in 2001. That is a significant problem—but a range of effective solutions is available.

As my hon. Friend has said, Hammersmith and Fulham has a very impressive recent record in housing issues. I am delighted that the borough is showing leadership and imagination as it faces up to the housing challenges confronting it. The borough was, as my hon. Friend said, rated excellent in the Audit Commission's first national comprehensive performance assessment—CPA—of local authorities, and scored four out of four for its housing service. Its housing management and caretaking service received a three-star rating from the housing inspectorate, which said that its service had a strong customer focus and excellent prospects for improvement.

If that is the picture in Hammersmith and Fulham, what is the picture nationally? At 1 April 2001 there were 1.6 million non-decent social sector homesa reduction of 700,000 from 1996. An analysis of the 2002 local authority business plans and information from the Housing Corporation shows that we are on track to meet the target of a one third reduction in non-decent homes nationally by 2004 but that we shall fall short of the 2010 target on current projections.

The Government carried out a review to improve the delivery mechanisms and put us back on track. The revised trajectory, based on expected implementation of the recommendations from that review, shows that we are back on track to meet the 2010 target, which was the purpose of the review. The question for all of us is how to continue to build on the success so far and take forward the outcomes of the review to ensure that we remain focused on our objectives of decent homes and sustainable communities.

The Deputy Prime Minister recently announced a communities plan, as my hon. Friend said, to map out how we can achieve a step change and ensure that we have quality housing in the right place, of the right type and at the right cost throughout the country. We are backing up our plans for improving social housing with cash—nearly £2 billion for arm's length management organisations and £685 million of private finance initiative credits over the next three years towards our target of making all social housing decent by about 2010. The communities plan makes it clear that the right strategy must be chosen for meeting the decent home target. By July 2005, every local authority with stock must produce for Government sign-off an objective and rigorous appraisal of invesment options for meeting the decent home target if it has not already done so.

My hon. Friend referred to the report by the Hammersmith and Fulham housing commission, "Our Community—Our Homes—Our Choice". As he said, I am more than aware that Professor Steve Hilditch, the independent chair of the commission, wrote to my colleague Lord Rooker on 4 April, seeking a discussion on that report. The commission's main recommendations support an alternative model for managing the borough's housing stock to those available under national policy and suggest that the Government should provide the borough with some additional funding that it would qualify for if it set up a high-performing arm's length management organisation.

As my hon. Friend has said, Lord Rooker explained why the Government could not accept that proposal. I have already mentioned the review of the ways of delivering decent homes. A clear recommendation of that review was that it was necessary to end uncertainty about the options available for delivering decent homes. This we did by setting out the options in the sustainable communities plan.

The plan made it clear that, as my hon. Friend said, local authorities seeking additional investment in their housing stock may choose from three options: stock transfer, PFI and ALMOs. Each option brings about a separation of the landlord function from the wider strategic housing responsibilities of a local authority, which is important in ensuring that each has proper attention. The options provide different devices, two of which leave the ownership of the stock with local councils but change the management arrangements.

We have made a number of changes to the way in which the options work, to make them more accessible to local authorities. Although authorities must undertake rigorous option appraisal to demonstrate which option or combination of options is most appropriate for their own specific circumstances, the plan also made it clear that authorities that do not pursue those options cannot, as my hon. Friend said, expect increased investment above that provided for in the housing investment programme.

That clarity has been broadly welcomed. I am sure that my hon. Friend will appreciate that it is not possible to make exceptions for particular authorities in the context of a national and declared national policy.

I have listened carefully to my hon. Friend and I am grateful for the kind remarks that he made about me and about the borough. He says that he is sure that that I will understand why it is not possible to make an exception, but I am afraid that I do not, particularly in the context of a high-performing local authority, and particularly in the context of a report like this, when it is clear to everyone that the desire of the overwhelming majority of the tenants who have been consulted in relation to this—I have no doubt that the same result would be obtained in a ballot—is to remain with the council, which they have known for many years and with which they wish to remain. I do not understand why it is not possible to make that exception.

My hon. Friend will know that, in the context of national policy, the commission says very clearly in its review of the option that

"Retention under democratic control would fall a long way short of achieving the decent homes plus standard: unless additional subsidy was made available to support borrowing; or the government relaxed current rules, for example to allow the major repairs allowance to be used to support prudential borrowing; or",
as my hon. Friend has already said,
"there will be very major revenue cuts and reductions in service."
"ALMO would probably enable the council to achieve the decent home plus standard on the basis of current estimates of the likely availability of subsidy to support prudential borrowing".
The Government have to operate and to make such decisions in the national context, not on a borough by borough, housing authority by housing authority basis. So I am glad that the commission has taken a pragmatic approach in examining the options for delivering decent homes. I am pleased that the commission's analysis identifies the ALMO option as possibly suitable for Hammersmith and Fulham. I am glad that the commission recognises that the council should follow
"the ALMO route as the best obtainable means of improving homes and protecting services."
I fully accept that it takes that view in the light of no positive response on its first preference.

We must always remember that ownership of the stock remains with the council, that the tenants remain secure council tenants and that an ALMO would involve greater and more development tenant participation. Currently, 25 ALMOs are in operation and responsible for managing and improving about 360,000 properties—one in eight of all council stock.

I am aware that the commission met representatives of Hounslow Homes and, I think, Kensington and Chelsea council. Between them, those round 1 and 2 ALMOs are considering investing an extra £1.8 billion to bring all their stock up to the decent homes standard. That is a huge investment and, in many areas, tenants are already seeing the benefits: in physical improvements and, perhaps even more importantly, in an improved relationship with the housing managers.

We recognise the wider importance of community renewal—communities are more than simply homes—so from ALMO round 3 onwards, we will allow up to 5 per cent. of the funding to be used for environmental or other regenerative works not immediately directed to the decent homes standard. It is right that ALMOs should remain focused on the task that they have been given—making homes decent—but that must not preclude local authorities from taking every advantage of all the money and programmes available to ensure that decent homes sit in decently maintained and confident communities.

My hon. Friend raised the issue of tenant involvement in the decisions that will affect them. As I have said, the review made a number of recommendations, but perhaps the key one involved putting the tenant at the heart of decent homes. I am glad that Hammersmith and Fulham council has taken that on board and, again, I recognise its record. It is evident that there has been a high level of tenant involvement in setting up the housing commission and in developing the options to deliver decent homes. I very much welcome that and would encourage it to continue. An integral part of tenant involvement, which was recognised by the commission, is in having a real say in how their homes are managed, which is why we have tenant places on the boards of ALMO—I believe that the commission looked at the Kensington and Chelsea model of 50 per cent., minus one tenant on the board. Experience shows that when tenants are involved from the start and have a sense of ownership of a proposal, they will support it. I am pleased, too, that the commission's report recognises, on page 43, that under the first preference, or under the second preference of establishing an ALMO, the council and tenants will be able to consider whether and how far to extend the level of tenant involvement in the management of council homes.

What is the way forward for Hammersmith and Fulham? In one sense, it is in the borough's hands, within the context of national policy. The borough has been through a process in which it has worked closely with its tenants and other stakeholders and has analysed the options carefully. The commission's conclusion is that, of the options available within the national policy framework, it would consider looking further at the ALMO option. It is for Hammersmith and Fulham to put that into practice. If the ALMO is the most suitable route for Hammersmith and Fulham, I am sure that the Government office for London and the community housing taskforce will work closely with Hammersmith and Fulham on the further development of that option, not least in the context of the 10 additional points that the commission makes on page 39, which are items for discussion that Hammersmith and Fulham would like to pursue were it to take the ALMO route, to get the ALMO model as close as it can to its first preference.

In many regards, many of the 10 options that the council has put forward, which the council would develop further were it to pursue a bid, are more than worth talking about in greater detail with the Government office for London and the community housing taskforce. Given the borough's recent record in housing, I am sure that it will have no trouble in making a great success of that option should it be pursued. I would certainly wish any subsequent bid a fair wind.

As I said, the commission determined that the ALMO option was appropriate to pursue if the first option were not pursued, and I would strongly encourage the council to talk further with the Governtment office for London and the community housing taskforce in that regard. Ironically, I suspect, as we have found in other models as they have been developed, the strong record of tenant participation and involvement in the key area of their lives—their homes—has been all the more pronounced in ALMOs than in some other models. That will continue rather than lessen, and I look forward to seeing how Hammersmith and Fulham takes its housing plans forward.

Question put and agreed to.

Adjourned accordingly at three minutes to Three o'clock.