Tuesday 13 January 2009
[Mr. Eric Martlew in the Chair]
Early Intervention (Finance)
Motion made, and Question proposed, That the sitting be now adjourned.—(Barbara Keeley.)
It is good to see you in the Chair, Mr. Martlew, and to see colleagues from all parties here to support—I hope—the principles of how we fund early intervention; its financing is a work in progress, and today I shall try to set out a stall for the next year’s work on making it effective. I hope to be lucky in the draw and follow up this debate with progress, towards to the end of the year, and then perhaps have another exchange with the Minister, whom I am delighted to see in his place. I do not know whether he thinks that I am tracking him on his journey around Whitehall. I have had lots of interviews and exchanges with him over early intervention, which have always been very positive and sympathetic. I now want to take the matter further with him in his new role and explore some of the financial aspects.
Will my hon. Friend refer to the report that he and the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) wrote? It is the most important report, official or unofficial, produced in Parliament since I became a Member 30 years ago.
I am deeply flattered by that tribute, as too, I am sure, is the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith). I hope that the report has made a small contribution to every party’s thinking—in a non-partisan way—on how we address some of the long-term problems facing us. My right hon. Friend gives me an excuse to say that bringing about intergenerational change will require a generation. Everybody, of all political complexions and none, will need to understand that. We will also require a social and political consensus to sustain it over the long term. That is what we were trying to do in the report, and what I continue to try to do with people of all persuasions of good will, who see that early intervention is actually a very long-term solution requiring the broadest possible social and political support.
I thank my hon. Friend for taking an early intervention from me—pardon the phrase. We will need a generation to convert and change the current culture. Nowhere will that be required more than in the media, which produce hyperventilating, hand-wringing headlines about an underclass. However, the moment that any Government, local authority or organisation try to tackle some of the problems, the media accuse them of being part of the nanny state and of interfering while parents try hard to bring up their children. Does he recognise that problem? How can we tackle it? We have in this place a genuine cross-party consensus on this matter; and I agree with my right hon. Friend the Member for Birkenhead (Mr. Field) that the report is magnificent.
I agree with my hon. Friend’s point, which has to be taken on board, about the nanny state. However, it is a greater nanny state that interferes in the court, policing and welfare systems and requires constant governmental remedial action at a late stage, which is very expensive. It is less of a nanny state that enables youngsters—whether up to the age of three or 18—to make the best of their lives and to become freestanding, self-starting, emotionally and socially rounded individuals who can take control of their own lives. Oddly enough, that will require less governmental interference and nanny state-ism and, therefore, save the Government and taxpayers a lot of money.
For the sake of this debate, I shall refer to the hon. Member for Nottingham, North (Mr. Allen) as my hon. Friend, because we worked hard on this report and agree on the subject. I also apologise to him, because with interventions at this rate he will never get through his speech. However, does he agree that during the baby P and Karen Matthews affairs—I have written about this—the media wrote from the standpoint of perhaps the majority in society, and that, especially during the Karen Matthews affair, there was a major shock that a group in society was living in such a state. The key is to ensure that that shock makes people say, “Something has to be done!”, so that the nanny state becomes completely absent and there is no nanny at all, whether family or state, in many of these lives.
I agree with my right hon. Friend—I am pleased to call him that in the context of this debate—about the media. Hopefully, the media will one day see that it is possible for colleagues throughout the House—whether in Government or aspiring to it—to work together, while of course continuing to have differences, and provide leadership in producing a serious early intervention package and understanding how we can finance it. I pay tribute to my right hon. Friend the Member for North-West Durham (Hilary Armstrong) for her pioneering work, not only as a member of the Cabinet but subsequently as a humble Back-Bencher who still, not so humbly, continues to push this agenda.
Before I give way, let me say that this debate has come as a bit of a surprise to us, because the original debate was withdrawn. I intend, therefore, to make my remarks at leisure, in order to keep up this conversation, which is far more valuable than the usual artillery exchange.
I congratulate my hon. Friend on securing this debate. As he knows, I have been lobbing things in the air and at the Treasury about this for some time. The evidence produced by him and the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) is similar to work that I did in the Cabinet Office. We now understand more about the development of the brain and how it works. We did not have that information in the past; now that we do, however, we would be derelict in our duty if we did not intervene. I am talking not about late intervention but about the right support and intervention at the time when it will give the child a chance of surviving and prospering in this world. If we do not do that, we will not have rejected the nanny state, but will have failed in our duty. We must be prepared to intervene much earlier than has often been spoken about thus far. For example, this morning I was reading a Government publication on families in Britain that came out in December. It mentions early intervention programmes for eight to 13-year-olds. They are important, but at that stage sometimes we will be too late. We must intervene at the right time and support the parents. All the evidence suggests that, if we do that, the life chances of the parents and children concerned will be incredibly enhanced.
I thank my right hon. Friend for that intervention and you, Mr. Martlew, for the judgment that you are exercising to provide for a genuine debate. You need to be credited for that, Mr. Martlew, because we need this sort of exchange if this House is to be taken seriously. My right hon. Friend the Minister has been involved in enough Adjournment debates to know that they can be a lonely experience, with only a Minister and one Back Bencher present. Today, the record should say that heavyweight and intelligent people from all parties are participating in this debate, and I welcome that.
May I bring my hon. Friend back to his point about the nanny state? As I see the way in which his ideas are developing, they may include an element of the nanny state, but the aim is to do away with it. In the extraordinary world that we have experienced, we were the product of a wonderful wave of working class respectability that transformed the nation. That respectability was also about how we raised children. For reasons that we do not have time to go into today, the nation is increasingly falling out of love with the way in which it raises its children—the next generation. The proposals in the joint publication, and others that the two authors have spoken about, aim to get us back to the self-governing society that we once had. We developed this extraordinary way of successfully raising children. Families cohered in a way that allowed them successfully to negotiate the outside world.
I say to my right hon. Friend that we must be careful that we do not talk ourselves into a debate about the nanny state because it does not get raised that often. I have read the works of Thomas Paine and they say that Governments, even in their best form, are a necessary evil. The idea that state-ism should control people’s lives—as some people on the left, the right and the centre believe—is anathema to my political tradition. We want to liberate people and give them the equipment to make their own way. That is the basis of many, if not all, of the mainstream political philosophies in the UK.
I will come on to the subject of parenting later. As my right hon. Friend the Member for North-West Durham knows, the famous child psychologist Bruce Perry was the first to pick out those shocking pictures of the brain size of a three-year-old who had been loved and nurtured and that of a three-year-old who had been seriously neglected. The contrast was between an ordinary three-year-old and a three-year-old in a Romanian orphanage. Physically as well, there was a difference in size. That stunning image was used by my right hon. Friend when she was running the Cabinet Office, and I have used it over and over again. Bruce Perry’s thesis is that there has been a breakdown in the intergenerational transmission of parenting skills. That is a sociological way of saying what I and my right hon. Friend the Member for Chingford and Woodford Green said in our modest publication “Early Intervention: Good Parents, Great Kids, Better Citizens”. If we continue that transmission of good parenting skills in a virtuous circle, we will be half way to setting up effective early intervention and creating self-starting, rounded and emotionally capable people. I will give way to the hon. Member for Castle Point (Bob Spink), but then, if I may, I should like to make a little progress because everyone is making my points.
May I move the hon. Gentleman from the philosophical and more general point to a very practical point? Regardless of what we do and spend, we will fail young children unless we get housing right. As Members of Parliament, we have all heard cases of single mums and families living together in very poor housing, being bumped from pillar to post, with children who are disabled, ill and sometimes emotionally challenged. Unless we make it easier for those people to get decent housing in which they can keep warm and dry and feel safe, we will not get anywhere. We have an economic crisis at the moment that could challenge financial support and early intervention. Those things would be a very soft target for ministerial cuts. We must not take our eye off the ball, and we could kill two birds with one stone by tackling the provision of housing for such children.
The hon. Gentleman makes a good point. As chair of a local strategic partnership, One Nottingham, I have learned that this matter is everyone’s business. The traditional idea that this issue is a matter for children’s services or health services is nonsense. Partnership—that overused word—is essential. We need people, from our employment partners, our housing partnerships and communities and development areas to help us on this. We must bring everyone to the party. This is not a problem that someone else will solve if we throw a bit of money at it and we appoint an early intervention project co-ordinator. It will be solved by everyone coming to the party and making their contribution. We are dealing with a circle. If we can intervene and break the intergenerational circle, then we are out into the open field in this policy area. To do that, everyone must play their part.
Like other right hon. and hon. Members, I should like to pay tribute to the hon. Gentleman’s work. I hope to bring a bit of relief to my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke) and the Minister by saying that we are not necessarily talking about huge amounts of public money. We all know that public money is very tight at the moment. Will the hon. Gentleman comment on the political will that is necessary for local authorities to work with organisations in the voluntary sector? In my constituency, the South Bedfordshire community family trust—known locally as Two in Tune—is having good discussions with our local authority. If there was real political will for local authorities to work with organisations in the voluntary sector to give families the skills and the support to be good couples and then good parents, we would go a long way to solving the problems. Often, people are more comfortable working with organisations in the voluntary and community sector than they are with an organ of the state. Will the hon. Gentleman comment on the political will that is necessary in local authorities?
The most valuable commodity in this debate is political will and commitment, and our greatest enemy is administration. We need to consider such things in a more radical and political light—I do not mean a partisan party political light. For example, I may say a little later—if I get there—that we need to free up local government. Brilliant creativity, which is currently inhibited in local government, is a tremendous waste of a national asset. The creativity in the House is wasted as well because we are not able to make an effective contribution or hold Government to account. The idea is that there is stasis—that we administer, manage and maintain the problems, rather than tackling the causes. That issue was one of the most exciting things about the work of my right hon. Friend the Member for North-West Durham. She laid out a pathway for getting to the causes and not just treating the symptoms. If we can do that politically, and set it out—it has to be a social and political consensus—we will go a long way towards tackling such issues. The voluntary sector needs to find its place. However, it cannot find a place as effectively in the locality unless we free the locality to find space for it. The sector would choose to do that, but it is often constrained by its targets and by being told that it has to do something by next year. Short-termism, which is a characteristic of late intervention, hamstrings the efforts that we could put in locally with the voluntary sector.
Another thing to mention is the possible publication of a White Paper on social mobility. I welcome the Government’s efforts, but policies will be built on sand unless we get every child in the United Kingdom up to a basic level of social and emotional capability. It is virtually impossible to stop a child with a rounded, general social and emotional capability becoming literate and numerate being excited by learning and wanting to achieve and aspire and to get a decent a job. Above all, it is virtually impossible to stop them wanting to be a good parent when they in turn have children.
In Nottingham, in our own small way, we have attempted to introduce an early intervention package of measures that allows children, from their very first breath, and even before that, as my right hon. Friend the Member for North-West Durham said, to develop social and emotional capability. If such measures succeed, policies for social mobility and educational attainment would flourish, and policies regarding apprenticeships and getting back to work would have a solid foundation on which to work. In Nottingham, I want to get the 31,000 people who are on incapacity and related benefits back into some form of work, as long as it is work that suits them and in which they can be confident of achieving. They would be better placed if we had those foundations in place. I would welcome a social mobility White Paper, but we need the firm basis on which such policies can move forward.
I shall address funding later, but to get the foundation right, every child should learn about half what they will ever learn in their first three years. Too often, there is no appreciation of the importance of that: a lot of people wait for their child to start nursery or school to start their learning, but it should actually have started before that. We need a transformation of support during those first three years. My right hon. Friend the Member for Birkenhead (Mr. Field) said that we had that in the past, but that we have lost it. We certainly need it now.
To build on what the hon. Member for South-West Bedfordshire (Andrew Selous) said on not worrying about the cost, does my hon. Friend agree that all the services are there, but that they are in different silos, so getting them to focus on the kind of transformation that I mentioned would not necessarily be costly? I am thinking of children’s social workers and health visitors, who are important, but the range of local government and national health services should also be involved. The hon. Gentleman mentioned the voluntary sector, which is important, and at national level, we have the Family and Parenting Institute, Parentline Plus, the Children’s Commissioner and Ofsted. With political will, we need to knit those services together—that is the transformation that we want.
My hon. Friend makes a number of intelligent points, as I always expect from him. George Hosking of the Wave Trust has greatly influenced me. Rather comically, he has explained via a dance that a woman would have to have hips about 5 ft wide to give birth to a baby whose brain is fully formed—I could not possibly do the dance that he does to illustrate this, and I would not attempt to do so. To put it succinctly—I find this preposition memorable—every child is born three years premature. Parents—we might be talking about a single parent living in one room—look after babies who, in other circumstances, could be in an incubator in intensive care. We ask poor, lonely, young people, often women who are on their own, who are not educated in parenting, to look after what is in effect a premature baby and to take that baby through those vital first three years, when the brain explodes with neuron growth.
Age nought to three is a vital period. Perhaps because I come from Nottingham, I have an image of an archery target with that age group in the bullseye. The next ring is the age three-to-18 group. They will be the carers in future, so if they properly develop, they will make the valuable nought-to-three period of the next generation as prolific as possible, through empathetic behaviour, nurture, love, warmth and the family values that are traditionally part of raising a child. My hon. Friend is right that that period is important.
I shall address costs later, but in a nutshell, it costs £250,000 if a child goes wrong and is banged up in a secure unit for a year at the age of 16, and £230,000 if a child ends up on an intensive drug rehabilitation programme for a year. Let us imagine what would happen if that money was put into nurse-family partnerships, in which nurses have a relationship with every young teenage mother. It would pay for 50 youngsters—I have done a quick calculation—to get the most fantastic help with nurturing and loving their child, which every parent wants to do. That would save us so much money down the road.
In Nottingham, for example, we could give warmth, comfort, security and expertise to the parents and children to whom I referred for £2.8 million—we are already doing so for a quarter of the children of teenage parents for £700,000. That is the same cost incurred by five or 10 people who have gone wrong, not including court, prison and welfare costs. The problem cries out for that kind of sensible investment. I shall deal with this matter later, but if we can figure out how to make that saving, we could also provide a tremendous income stream for the Government for 20 or more years as this generation grows up.
My hon. Friend has moved on from this issue, but I have found, through my dealings in the media—the right hon. Member for Birkenhead (Mr. Field) mentioned this—that when we talk about children failing generally, the questions are always about schooling. The media are absolutely obsessed with bad or failing schools, but they fail to recognise—it is difficult to get this across—that a huge chunk of a child’s education, even after the age of three, takes place at home and that, before the age of three, it takes place exclusively at home.
People need to understand that, if they want children to excel at school, they cannot simply say, “Everything is down to the school.” They must understand the huge significance of family involvement. The family must take the child to school or nursery education ready, as my hon. Friend has said on many occasions. This is the most difficult thing to get across to people, because they keep coming back to the fact that it is the school’s or the teachers’ fault. In fact, schools and teachers pick up the pieces of a failure that we should have dealt with right at the beginning.
If it is anybody’s fault—I do not think that ascribing fault is helpful—it is the fault of policy makers, so we need to look to ourselves and what we do. That takes me back to the last point made by my hon. Friend the Member for Stafford (Mr. Kidney). Local resources are available, and some of the numbers involved are quite small: there were 500 teenage parents last year in my city, and the number of people in key groups who need specific help might be in the dozens or as much as 50 or whatever. If the figures are broken down and dealt with effectively at a local level, we are not looking at an impossible tsunami of millions. However, as well as those resources needing to be deployed properly, as my right hon. Friend the Member for North-West Durham pointed out, we need strategy. One of her breakthroughs when in the Government—she has now had to leave the debate—and one of the breakthroughs that my right hon. Friend the Member for Chingford and Woodford Green should also claim credit for, although within his own context, was that they brought strategic thinking to the subject. Should not Governments and Parliaments really be concerned with knowing what needs to be done across a generation, as well as with deploying resources here and there? Often those resources can be deployed far more sensitively by more free and independent local government and other vehicles.
May I make a plea that we are pushing at an open door? When I ask children and young people in Birkenhead and Manchester what they would most want from their school if they had a school contract, every one of them said that, within their first four priorities, they wanted to be helped to be good parents. The stunning facts that my hon. Friend has just given about the first three years of life would not only make the basis of some pretty good teaching and learning in schools, but start to give young people guidelines on their responsibilities for that intensive care over those first three years. No one now tells them what those responsibilities are, so why should they know?
There are so many brilliant concepts and philosophies relating to this area, including the sort to which my right hon. Friend has just alluded, and we need to liberate people’s capacity to implement them. I hope that that point will draw me back to not only the concept of early intervention, over which I have laboured in several Adjournment debates, but specifically its financing, because that is the guts of the debate. In looking at ways of drawing in finance to make early intervention work, I would like to make it as easy to invest in the human capital of healthy and happy young children as to invest in the physical capital of land, buildings and machinery, the intellectual capital of ideas, inventions and artistic creations and the financial capital of company shares and bonds.
The current economic downturn has been a signal for radical rethinking on borrowing and spending, and that needs to extend beyond what was done in the 1930s to what we need to do for the 2030s and the generation now growing up who will be adults a century after the great depression. Today’s borrowing must be tomorrow’s springboard for success, not a ball and chain or something that gives no returns in the future. The investment must give those returns massively and in ever greater amounts, create growing dividends and savings for a generation and help to repay current borrowing—something that must be done in the future.
Sadly, the case of Baby P has backed up the claim made in a recent publication in The Lancet suggesting that one in 10 children suffer abuse, and my view is that they are just the extreme tip of the iceberg. The bulk of the children to whom I am referring are those who, to put it more mundanely and less dramatically, would benefit from effective parenting, which can be created by early intervention. If children grow up healthy and happy in households that offer them love, nurture, stimulus and empathy, their prospects improve dramatically for the rest of their lives. They are less likely to commit antisocial behaviour and crime or to become dependent on alcohol or other drugs. They are more likely to achieve at school and less likely to stress their teachers and disrupt the education of others. They are more likely to secure well-paid employment and become taxpayers and less likely to be dependent on welfare. They are less likely to have unwanted pregnancies and more likely to become great parents of children whom they will also wish to raise to be good parents in their turn.
Taken together, all those effects suggest that successful early intervention policies will generate an exceptional financial payback, which could be seen as a bonus. I do this sort of work because I care about the kids in my constituency, but by the way, it will make the Government billions of pounds if done properly over the long term. To use a fashionable Keynesian expression, early intervention is a massive multiplier. That sort of common-sense economic and financial conclusion has now been underpinned by fantastic amounts of research. Five or 10 years ago, we might have been scratching around for an evidence base to prove it, but we now have a lot of solid evidence, not least because of the superb work done by Treasury officials in the lead up to the last comprehensive spending review.
There is also the work of James Heckman, the 2005 Nobel prize winner, who demonstrated that the economic payback of pre-school intervention was three to six times higher than that of post-school intervention. When I talk to people about that and try to search for the right words, I often refer back to my mum, who said that a stitch in time saves nine—it does not need to be a highly scientific explanation. We all know that helping a child early will save ourselves a lot of grief and expense later on.
Even last week, I discovered that a tremendous evidence base is being built in Birmingham, not least because of the inspiration of Steve Aos, who has done many calculations about returns using a very conservative methodology that gives the lowest possible return in all cases. Birmingham is now using some of that evidence and has a £41 million package that is intended to save £102 million, but I need to examine that a little further.
One thing that I do know about is the nurse-family partnership, because we brought it to Nottingham and, as I mentioned earlier, are using it with single teenage mums. It is a home visiting programme for low-income mothers with their first babies. The programme is now 26 years old. Professor David Olds, who started it in the United States, has an evidence base of 26 years—try contradicting that. It was based on extremely rigorous and deeply conservative, rather than speculative, assumptions. He has demonstrated, and independent scrutiny has supported, that under the programme mothers were significantly less likely to abuse or neglect their children or to have subsequent unintended pregnancies or misuse alcohol or drugs. They were significantly more likely—percentages are attached to these claims—to enter stable employment and escape welfare benefits.
Unsurprisingly, the programme has also demonstrated enduring benefits for the children. Compared with their control group counterparts who did not have intensive nursing and health-visiting support, those who did made 56 per cent. fewer visits to hospital emergency rooms, so child abuse and accidental injuries were reduced. As adolescents, the children who had been through the nurse-family partnership were arrested 56 per cent. less frequently than their other cohort counterparts and had 81 per cent. fewer convictions. As 15-year-olds, they had had 63 per cent. fewer sexual partners. There is a wealth of evidence, which I know the Minister has seen, to support those statements.
Clearly, appropriate intervention saves lots of money. The Treasury recognised that in the run-up to the last comprehensive spending review, as well as acting on it, which I welcome warmly, in a number of areas. For example, the Treasury supported Every Child a Reader, which gives one-to-one attention to young disadvantaged children struggling with reading and writing. The CSR backed the scheme, saying that raising children with poor education to the average would save £6 billion in public expenditure to deal with the consequences of poor literacy.
As my right hon. Friend the Member for Birkenhead said, we are pushing at what I hope is an open door at the Treasury, and we have one foot through that door. The only thing that I want from my right hon. Friend the Minister as a result of this debate is for that work to be taken further. I would like to discuss more informally with him, and perhaps with colleagues who are present today, how it can be taken forward along with the Treasury’s work. I do not want a cheque tied in a pink ribbon or a commitment that this or that financial instrument will be used in future, but I do hope that the Minister will entertain a continuing dialogue over the next year with colleagues of good will from all parties.
My experience from chairing the local strategic partnership in Nottingham, which pioneered the package, is that it is dangerous to seek short-term funding, funny money, two-year grant aid and the like. It is disruptive, the criteria and Government policy can change and it is uncertain. Therefore, I am looking for a long-term answer and a long-term commitment over a generation, with payback over a generation. I do not want any favours. I do not want social or ethical money from somebody trying to help me out. I want money from the hardest-faced capitalist who can be found in the toughest financial market that can be found, who sees it purely as a great investment that will yield them a return—not because they want to help the kids in Nottingham, North or any of the other constituencies represented here today, but because there is a tough case for it as a money-making scheme.
I need to devise a plan with the Treasury and others. I have pulled together a group of high-powered people from the City of London and the public and voluntary sectors to work on the matter, and I hope that collectively we will come up with something. As a constituency entrepreneur, I am happy to continue working on it with friends in this room, but I hope equally that the massive possible returns will interest the Treasury in working on its own to explore the possibilities.
There are some interesting points that I could make on the UK system of finance, but I shall try to avoid making them. One that I must mention is that local government often does not have the capability to make independent decisions, even where it sees ways to tackle local problems sensitively and make large savings.
My hon. Friend made a point earlier in his excellent speech about local government’s freedom to innovate. At times local government has had that freedom. In 1973, Margaret Harrison, an organiser of voluntary work in my county of Leicestershire, created Home-Start, one of the parents of Sure Start. At the time, local authorities were not constrained too much by league tables and targets. The problem with Sure Start, which is now funded and directly managed by local authorities, is that a layer of bureaucracy has been inserted into it—targets for Play-Doh proficiency and things of that kind—which obfuscates the purpose of the exercise. There can be risks. I am a big supporter of giving local governments freedom, but they should not be led astray into thinking that they must have a target framework within which everything must operate, because that is damaging.
I am just about to come to the question of local government, and I will address my hon. Friend’s points directly then. I hope, Mr. Martlew, that you feel that this has been a genuine debate. I have forgone pages of script to keep that debate going. It has been extremely useful. As an aside, I can only wish that Westminster Hall was used more frequently for exchanges such as this and less frequently as a mini-Commons Chamber where we do not listen to one another.
In the short time left to me, I shall outline a couple of possibilities, which I put to my right hon. Friend the Minister so that there are no surprises and so that we can have a further dialogue. They illustrate the scope of the task.
It is clear that in extraordinary times such as these, the unthinkable, such as nationalisation of banks, can become commonplace rapidly. The most radical proposal is full independence for local government. I say that it is the most radical; it is actually commonplace in most western democracies, but it is a rather radical suggestion in the imperial United Kingdom. Each local government unit would have the freedom to borrow against its credit rating for any purpose, using any means that it could persuade financial markets to accept. Central Government would have to stand aside; it could neither approve the borrowing nor give any guarantee on default.
As in the United States, borrowing could be subject to local referendum. Why not involve people? They often say, “I’m sick of those blinking kids down on the street corner. Can’t we do something about it?” Many people do not believe in “hang ’em and flog ’em.” Many appreciate that youngsters should be helped. “Give them something to do,” they say. “Why can’t they help their mum? Where’s the health service?” Local people appreciate that answers can be devised locally, so why not involve them in local referendums?
Municipal bonds are long established in most democracies, and are regularly used to fund long-range early intervention policies. They are an attractive way to do so, as many investors are willing to hold long-dated bonds until maturity and accept no returns in the early lifetime of the bonds. Bonds are also tax-exempt in the United States.
When I last considered the subject, in the middle of last year, there were 50,000 state and local entities in the US alone that could issue securities and more than 2 million separate issues outstanding, with a combined value of $1.7 trillion. More than 5 million US households owned municipal bonds directly or indirectly, and I understand that they have become still more popular since the crash in other asset prices. US municipal bonds are available to British investors, with the curious result that people in Nottingham can invest in the future of children in Colorado but cannot invest to finance similar packages or schemes in their own city.
A less radical proposal, but one that would still require political will, would be to have a new national savings issue dedicated to early intervention. Its proceeds would be ring-fenced and re-lent to local government or other vehicles to finance approved programmes. That might be attractive to lenders and markets because of the guarantee against default, but it would obviously be less attractive to local government because it would subject all its early intervention activities to central Government control or oversight. However, I am sure that local government could live with that.
A still less radical possibility would be for the Government to relax the criteria allowing local government or other structures to borrow directly from the Public Works Loan Board, or to undertake prudential borrowing. At present, these facilities are limited to physical capital projects, such as buildings and transport, which is an issue that I have raised with Treasury officials in the past. If the facilities could be extended to include human capital investment, that could open up a new means of financing early intervention. I hope that we can also explore these ideas, without commitment, with the Minister and his colleagues over the next year or so.
The Government might also consider the possibility of creating special purpose early intervention trusts, or socially responsible early intervention companies with powers to borrow money. So there could be some arm’s length agreement. It is not beyond our collective wit to come up with some measure in this area.
More simply, the Government could commit dedicated long-term grant aid to early intervention projects from current revenues. That suggestion is not attractive to me or to local government, because it would make those projects vulnerable to a change of mind by central Government when circumstances changed at national level. I would guess that it is not very attractive to the Treasury either, because it would involve committing current revenues far into the future.
Alternatively, the Government could examine the precedent set by the Department for Work and Pensions and work out the cost of a lifetime of public intervention for, say, 1,000 children, then offer half that cost to a private company, for example. The Government would immediately save half the costs of those 1,000 lifetimes and the company would be incentivised to have a brilliant early intervention programme, to retain savings, to increase its profits and to reduce the costs of remedialism, rehabilitation and a lifetime on welfare benefits. These are ideas that I am sure we can explore across the party divide and through the good offices of Government.
A further very simple proposal is that the Government could match the baby bond with an equal donation to each local authority or trust for each newborn child in its area, with the proceeds to be spent on early support programmes.
Whatever new investment vehicle is created for early intervention, it will face one key question and I hope that colleagues will help me in trying to think it through. How do we identify and capture the combined savings from early intervention and pay back the investors or original grant aid? That is the key question and it is one that I hope we can work with the Treasury to think through. I have thought about it a lot and I do not pretend to have come up with an answer yet. I hope by the end of the year to be able to pull together some of the work on that issue. It is the key question. The rewards of early intervention are real, but they do not always take the form of a stream of money income or a specific asset that rises in value.
This is a footnote to the point that my hon. Friend has just made. At the local level, we want people to spend to save, as he powerfully argued today. At that level, it may be that one person or body, such as the council, is required to do the spending, and another person or body, such as the criminal justice system or the NHS, will make the saving. Obviously, therefore, the need is for us to use these powerful messages to invade the local activity in every organisation. These days, the Government like that activity to be governed by local area agreements or multi-area agreements. However, is it not the case that we need to mobilise the Government, the Audit Commission, ourselves and the media if possible, to invade that process of local activity and make this issue a priority?
First, we again need the strategy and the highest-level political commitment, and I do not just mean whoever happens to be the party leader in power at that time. There must be a consensus and the strategy must be driven, in almost Swedish style, over 30 or 40 years. So we need that core commitment and strategy in place.
In addition, we need to ensure that the instruments that we are currently developing in Whitehall, whether they are local area agreements or other targeting instruments, are seen as being less crude and intrusive and more related to showing nimble and lively sensitivity locally, so that people can figure out what is happening locally. That is the alternative to a one-size-fits-all approach, where the name of the city is simply changed. We need instruments that genuinely reflect local circumstances.
Even in my own city of Nottingham—I am sure that it is also the case in my hon. Friend’s constituency —there is a big white working-class former council estate area, which I represent, and next door there is a very different, ethnically diverse inner-city area; my hon. Friend studied there and will recall it well. Even locally, therefore, we need to be sensitive, so that some of the crudity of approach that is imposed by one-size-fits-all thinking is loosened up and made much more sensitive, so that it can react a little more nimbly to local circumstances. Then, as my hon. Friend said earlier, there will be the resources locally to achieve that type of early intervention effectively.
The rewards of early intervention are not always that obvious and they take the form of outcomes for children throughout life that are better than the outcomes for children who did not experience early intervention. How do we value that difference? That takes us back to the key question that I referred to earlier about capturing savings. I think that the answer entails comparing two cohorts of children, as has been done in New Zealand and other countries, to establish the difference between a cohort of children who have experienced early intervention and a cohort who have not experienced it. My right hon. Friend the Member for Chingford and Woodford Green and I have asked party leaders to consider this proposal, as one of the key recommendations at the end of the book that we put together.
If the two cohorts of children are compared, we can figure out the percentages for fewer crimes, fewer demands on the health service, more time spent in employment, and so on. Of course, making such calculations is a formidable challenge and will involve a great deal of hypothesising, but making them will become easier if we build in this system of comparison over a generation, as we develop more knowledge of the detailed benefits of early intervention programmes. Indeed, the Treasury has already got past first base on this issue as a result of the work that it did prior to the last comprehensive spending review. There are also possibilities for involving the insurance industry, so that it may contribute its insight to the task of assessing rewards that only emerge over the long term.
I have taken some time this morning to make my case. I hope that I have left enough time for the Front-Bench spokesmen to make their contributions. I have deliberately encouraged people to participate in a genuine debate and it has been an extremely good debate this morning. I have just touched on some very complex technical territory. A lot of hard work needs to go into examining this issue and I hope to return to it towards the end of the year, to see how far we have got.
There are basically three fundamental truths in this area. First, the rewards of early intervention are far-reaching and the costs of late intervention are becoming prohibitive. Secondly, early intervention programmes must be long-term programmes and they are always at risk if they are compelled to rely on short-term financing from current revenues. Thirdly, it is both prudent and practicable for Her Majesty’s Treasury to help us to devise new forms of investment finance for early intervention that will meet the demands of lenders and allow the nation to improve its stock of human capital as efficiently and rapidly as it meets its other capital needs.
I would encourage the hon. Member to accept a fourth fundamental truth in this area. It is that if we get housing right, then social stability, health, education and finding employment for parents become so much easier and more achievable. Conversely, without decent, longer-term housing prospects, the young families that we are discussing will not move forward in these ways and any money that is spent will be less effectively spent.
The hon. Member is a great advocate for the causes that he believes in and I know that his words will be taken seriously.
Thank you for the way that you have allowed us to have a genuine debate this morning, Mr. Martlew. There is a great deal more to say about this issue and I would hope to say it, with some positive conclusions and some really concrete proposals, later in the year. All I ask of the Minister is that he keeps an open mind and helps us, where possible. Specifically, I hope that he will undertake to meet me and any colleagues who have participated in the debate this morning at some point in the not-too-distant future. Thank you again for your tolerance this morning, Mr. Martlew.
I am grateful for that, Mr. Martlew, and I shall keep my speech to about one minute.
First, I congratulate the hon. Member for Nottingham, North (Mr. Allen), whom I can legitimately call my hon. Friend in relation to these matters, as we have had so many conversations on it and have done so much work together. I have enormous respect for his work on this issue. He has mentioned the Wave Trust and George Hosking, who put me on to this issue and eventually to my hon. Friend. That is how we came together in what I hope has been a positive way. I thoroughly enjoyed working on the book that we worked on together. We continue to work together—I say this to all colleagues in the House—because we want to drive this matter forward as our No. 1 priority.
Let me quickly welcome the Minister. We have faced each other on many occasions, and have had plenty of private conversations, and I know that in his heart of hearts he agrees with all of this; I am sorry if that destroys his career prospects. I believe that he is headed in the right direction, personally, on this issue. The Government and Government spending are other issues, but I ask him, in this case, to let his heart drive his instincts and to let his instincts drive the Treasury, which sometimes lacks both.
I want to address a few elements before I sit down. First, it is critical that we understand early intervention, which my hon. Friend has discussed. The media often come back to crime and sentiments such as “lock ’em up” or “bash them, bang them up, do whatever—it is not hard enough,” but the prison population has risen and we know, mostly, who will be committing crimes tomorrow. For the most part, we know where those people will be drawn from, and they are mostly from the group we are discussing.
About 60 per cent. of all those in prison come from broken and often dysfunctional homes, and they have average reading and numeracy ages of a child of 11. More than 30 per cent. of those in prison come from care homes, although only about 0.6 per cent. of all our children have ever been in care homes. The vast majority of those children are drawn from that same community, and they dramatically furnish our prison population and crime figures. About 60 to 70 per cent. of prisoners have major drug or alcohol problems, and many have mental health issues. All that is drawn from the start that they got in life and what has happened to them.
Schooling is critical, because such children will never stay in school until they are 18. It is a nightmare to get them to make it to 12, 13 or 14 before they decide arbitrarily to leave the schooling system and end up on the streets. Their role models are in the communities of what has been referred to as the underclass. Those children rarely see anyone go to work, and they are often from families with two or three generations of worklessness. They may be from broken homes and have lone parents. The society that many such people experience is completely different from that experienced by those of us who dictate the debate on these matters. We need a better understanding of why these problems exist.
I have one plea to make and then I shall sit down. Together, we have been to all the party leaders, and we have received a good response from all of them, but I ask the Government to initiate the next stage. That has to be drawing in the other party leaders and people such as the Conservative Front-Bench spokesman, my hon. Friend the Member for South-West Hertfordshire (Mr. Gauke), whom I welcome, to thrash out these issues and reach consensus. If we do not get consensus, things will change every time a new Government come in and cut programmes because they are too expensive. We will get nothing out of this debate if we do not get consensus.
The key is getting a 20-year programme of change that we agree on. We need not agree on all the mechanisms to be used, but we should at least agree on the objectives. If we do that, we will have achieved something that is about good government. We go on about the nanny state, but we are already the nanny state in these areas, and an ineffective one. The costs of that are enormous and we still fail to change people’s lives. This is not about having no government or smaller government, but about having effective government, and I welcome that.
It is a great privilege for me to congratulate the hon. Member for Nottingham, North (Mr. Allen) on securing the debate and on speaking so eloquently on this subject. It is also a privilege for me to follow the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), who also has a long-standing and admirable interest in this field. We have the added context of the fact that the right hon. Member for Darlington (Mr. Milburn), who could not be present today, has been asked by the Prime Minister to do additional work on social mobility. That subject matter is not identical, but it overlaps with what we are discussing.
The problems are familiar to us all as constituency MPs, but it is worth touching on some of them, one of which is educational underachievement. I take the point that once children have reached formal education, much of the mould has already been set and the problems are already in train. Nevertheless, this issue is indicative of a wider malaise.
In the most deprived areas, 44 per cent. of schools achieve the requisite Government target GCSE pass rates, compared with 97 per cent. in affluent areas. So, children reach that level of attainment almost across the board in affluent areas, but in less than half of schools in more deprived areas. Only 21 per cent. of children who receive free school meals achieve five good GCSEs. To touch on the points that the right hon. Member for Chingford and Woodford Green has just made, many people who find themselves, in adult life or adolescence, in prison or otherwise severely disadvantaged have failed to reach those basic levels of attainment much earlier.
Relative financial poverty is another factor. The Government deserve some credit for seeking to address that systematically by targeting money, through one-to-one tuition, to equip people with greater skills in the workplace. There are also schemes such as Home-Start—I am familiar with Home-Start in Taunton—which is an excellent organisation. Under the scheme people, mainly mothers, mentor new mothers who are in less fortunate circumstances and try to pass on mothering and life skills.
We have touched on the cost of failing to intervene in terms of prison places and drug rehabilitation programmes. We can all agree that considering the matter simply in statistical terms of financial cost, education and Government programmes may mean neglecting the biggest aspect—the emotional and spiritual poverty in many communities. This is not simply about financial poverty; it is about deeply entrenched unemployment, about people living lives that lack structure or focus and about all the social ills that arise from such circumstances.
What about the solutions, inasmuch as we can readily arrive at solutions, and ideas for improvement? I agree with what the hon. Member for Nottingham, North said about the role of local government. We should encourage local communities, not only through local government but at lower and more immediate levels, to be imaginative in their solutions and to take responsibility for their own neighbourhoods. People should not see this as entirely an exercise of initiatives that are devised in London and passed down for implementation.
I agree that the private sector has a role to play. The hon. Gentleman’s thinking is extremely radical in that regard. Although the implications might be alarming for his colleagues and others, including some people in my party, we ought to explore that area.
Education is clearly important, and more could be done to help children before they get to school. That would be a better use of Treasury money than the baby bond that matures when children reach 18, when, I think we all agree, the direction of travel for their lives has mostly been determined. My party, as well as the Conservatives, and perhaps the Government, have talked about the so-called pupil premium to target extra financial resources at children who are falling behind in the primary school years of their education. In the past day or two, the Government have made announcements about giving incentives to teachers to stay in schools where the cohort of children is harder to teach. I welcome such initiatives.
The nanny state has been mentioned, and I think that agencies of the state have difficulties. For example, there was clearly a need for greater intervention in relation to Baby P. However, the newspapers that were critical of Haringey social services—I do not say that they should not have been critical—also criticise social services departments for confiscating children and say, “How dare the state behave in such a heavy-handed way?” There is a difficult balancing act to be achieved.
I admire the work of the hon. Gentleman and the right hon. Member for Chingford and Woodford Green. The latter talked about the prison population, which is a stark demonstration of the points we are discussing. However, I am slightly cautious about the risk of confusing cause and effect, and have some reservations about adopting a prescriptive approach—for example, financially penalising people for not being married. My parents are married and I went to university, but it is likely that I would have gone to university even if my parents had not been married. Sometimes inferences that might apply in general terms can be made, but they do not always apply in specific terms, and we ought to be cautious about that.
I conclude with this observation: aspirational poverty is the greatest danger that we must tackle. I think that the hon. Gentleman talked about liberating the capacity for people to help themselves. Dealing with this issue is not just about providing facilities. Since the Victorian era, free education has been provided by the state and we have had free libraries for anybody who wishes to go and read the complete works of Shakespeare or the day’s newspapers. Those services exist, but people need to want to access them so that they can realise their potential. It is not just about equality of wealth; it is about everyone being able to enjoy the full richness of life. I welcome this debate and, in the spirit of our contributions, I hope that the Minister will try to see this as a long-term, cross-party issue. We are all keen to achieve the objectives discussed. Those objectives will no doubt be further mentioned in the final two speeches.
It is a pleasure to serve under your chairmanship today, Mr. Martlew, and I congratulate you on the way in which you have chaired the debate. I congratulate the hon. Member for Nottingham, North (Mr. Allen) not only on securing the debate and on setting out his thoughts so eloquently—and, indeed, on bringing in contributions from a number of right hon. and hon. Members—but on shaping debate on the subject more broadly. He mentioned that he has held a number of Westminster Hall debates and has raised the issue of early intervention in a number of contexts, inside and outside Parliament. In doing so, he has contributed hugely to developing political parties’ understanding—not just his party, but all parties—of the advantages of early intervention and has contributed to the wider debate outside.
I also congratulate my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith). He has made an enormous contribution to increasing the understanding of some of the difficulties that we face in society and some of the ways in which we can address those concerns. My right hon. Friend and the hon. Gentleman have worked together on the publication of their book “Early Intervention: Good Parents, Great Kids, Better Citizens” and have provided an example to all parliamentarians. The right hon. Member for Birkenhead (Mr. Field) had another engagement and is no longer in the Chamber, but he mentioned that it was the most important report that he had read during 30 years in Parliament, which is praise indeed. At a time when there is great cynicism about politicians, if the public were to see the way in which my right hon. Friend and the hon. Gentleman have worked together and brought forward the debate, they would be hugely impressed.
The central argument is that a section of society suffers from low aspirations. That important point was made by the hon. Member for Taunton (Mr. Browne). Often, the problems of drug and alcohol abuse, family instability, crime, and worklessness are passed from generation to generation. That creates neighbourhoods in which those characteristics become the norm and are prevalent. Sections of society therefore live a life of hopelessness.
My right hon. Friend the Member for Chingford and Woodford Green and the hon. Member for Nottingham, North have made the case that, although Governments of both parties have responded by trying to tackle the consequences, such as crime and poverty, they have not tried to tackle the causes to the same extent. The emphasis needs to be put on the early years, particularly between nought to three years old, which is the time when a difference can be made. The right hon. Member for North-West Durham (Hilary Armstrong) made an important point about understanding more about the development of the brain. So there is a great opportunity during those early years.
Clearly, dealing with this issue will benefit the poorest families, who will receive help directly, but it will also benefit wider society by reducing crime and antisocial behaviour. In the long term, demands on the taxpayer will be reduced. To use the terminology that my party tends to use, if we can tackle the problems of a broken society, we can reduce the demands on the taxpayer in the long term. Effective early-years intervention is a vital component of achieving that. The hon. Gentleman used evidence of studies in the US—for example, the nurse-family partnership’s home visiting programme—to demonstrate how effective that can be.
A corollary of the focus on early intervention—the hon. Gentleman teased out this point effectively—is the requirement for greater diversity in the provision of services. We need experimentation and for people who are close to the ground to be prepared to try something different to find out whether it works. That, of course, is an argument for greater localism—a point that the hon. Gentleman made—for trying to give greater powers back to local authorities and for moving away from over-prescriptive targets. That is vital, because doing so allows for greater involvement of the voluntary sector—a point made by my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) and mentioned by the hon. Member for Taunton. Greater localism provides greater scope for the voluntary sector to play a role. Perhaps for understandable reasons, that sector shows greater initiative and experimentation in addressing some of these issues. My right hon. Friend the Member for Chingford and Woodford Green made an important point about the need to enlist the voluntary sector, and my party supports doing so.
How do we ensure that we maintain the focus on early-years intervention? The key point in this debate has been about financing. The hon. Member for Nottingham, North is clearly thinking imaginatively and radically about ways in which we can deal with that, and we certainly encourage him to continue to do so—it is incumbent on all of us to do so. The key problem is how to capture the benefits. The hon. Member for Stafford (Mr. Kidney) made a good point about the difficulty of some of the expenditure being incurred in one area and some of the savings in other areas. We need to think about that.
May I just raise a small note of caution? The hon. Member for Nottingham, North argued that the current climate has made us think more radically about borrowing, but I do not think that he will be surprised to hear me say that we need to be a little cautious about that. One of the arguments for early intervention is that it will lead to long-term benefits. I am not going to get into a debate about the current state of public finances, but there are long-term difficulties with the borrowing that we face, and I am nervous about that. There is clearly scope for reprioritising within the existing budget, to find savings that enable us, for example, to abolish the couple penalty in the tax credit system and to provide more health visitors. All that is possible within existing budgets, but I shall end on a conciliatory note, because we have had an excellent debate. The hon. Gentleman deserves to be thoroughly congratulated on pushing the agenda; it has support certainly from my party and, I believe, from all parties.
I thank my hon. Friend the Member for Nottingham, North (Mr. Allen) for securing the debate and for the way in which he has pursued the issue over such a long period. He has followed an unusual and possibly unique path by taking on executive responsibility, as chair of One Nottingham, for programmes in his constituency, while pursuing Ministers and policy issues in the House. He has pursued a very fruitful programme, and I echo other hon. Members’ tributes to him and to the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) for the contribution of their pamphlet and for other collaborations on thinking in this area. We have had a remarkably consensual debate, and I, like others, hope that the cross-party consensus will endure.
My hon. Friend referred to this morning’s White Paper, “New Opportunities: Fair Chances for the Future”, which was published more or less at the moment when he stood up to speak. I have been able to obtain a copy, and I draw his attention to one paragraph that touches in particular on our debate this morning. Paragraph 8.42 states:
“There is strong evidence that the right kinds of early investment in all people, particularly the young, can deliver substantial returns not just for individuals themselves, but also for society and for government. It is therefore sensible to examine, as part of our commitment to delivering value for money in public services, innovative new ways to achieve such investment. Alongside public investment, several models have been suggested for enabling private or third sector organisations to invest in public services in return for payments linked to social outcomes, such as those models proposed by the Council on Social Action. Government departments and other public authorities should explore contracts for payment based on outcomes”,
and so on. I hope that my hon. Friend will take that as evidence that the vigour with which he is pursuing the matter and his conversations with the Prime Minister and others are bearing fruit, but he is absolutely right—others have made the point, too—that such thinking must go a good deal further.
In the debate, we have heard about the evidence that shows conclusively that good-quality child care, early education and good home-learning give children the good start in life that they need. That has been the background to a number of changes that the Government have made: the Employment Act 2002, for example, extended maternity allowance to 39 weeks and introduced two weeks’ paternity leave for the first time, thus enabling millions of parents to spend more time with their children in the first few precious months of their lives.
My hon. Friend and others talked about family-nurse partnerships, and the new opportunities White Paper refers to them in chapter 7, which is entitled “Strengthening family life”. With the White Paper, it has been announced today that we will increase the number of family-nurse partnerships, based on the US model that my hon. Friend spoke about, to up to 50 by the end of next year—a significantly faster increase than was originally planned, thus ensuring that disadvantaged families get the help that they need.
We have now invested almost £2 billion in Sure Start children’s centres. The target—2,500 centres—was reached in the spring of last year, providing services to well over 2 million young children and their families, and there will be another 1,000 centres by the end of next year. All of us will have visited such centres in our constituencies, and it is clear that future generations will reap substantial benefits from that programme of early interventions. I have certainly been very impressed by what I have seen throughout the network of children’s centres in my constituency. Our report on the next steps for public service reform, “Excellence and fairness: Achieving world class public services”, sets out the need for services to focus increasingly on prevention, and that focus is reflected in the White Paper.
I shall suggest three challenges that we must address, some of which have already been touched on in the debate. First, many issues, from antisocial behaviour to rising obesity levels, on which early intervention can deliver real benefits, require an active contribution from citizens themselves, as well as through public service provision. Derek Wanless estimated savings of £30 billion over 20 years if people all took simple steps to look after their own health, and it is true that cost-effective early intervention will rely on services in which responsibility is shared between service providers and professionals on the one hand and users on the other. That can be difficult to achieve, and we must design incentives for citizens, as well as for service providers.
My hon. Friend the Member for Stafford (Mr. Kidney) referred in his intervention to the second challenge: early intervention requires joint working across traditional service boundaries and, most obviously, when the cost of a programme is in one budget but the benefits score in another. We need to enable and encourage services to pool budgets where appropriate.
Thirdly, the most challenging problem is one of measurement. We can gain a reasonable sense of the likely cost and subsequent return on a bridge or on an airport runway, to quote a current example. The materials that we need to build such things are finite, and once they are built, they will not move around or refuse to do what we want them to do, but even those projections are often hotly contested. Working with human beings and with children, however, is infinitely more complex, and it can be very hard to attribute causality and establish the reliability of even relatively small and focused interventions.
Evidence shows that many preventive interventions are dependent on circumstances and the quality of their delivery, so, for example, some cognitive programmes that aim to prevent reoffending are demonstrably successful, but one evaluation suggests that they can suffer hugely from variability in implementation. That results in apparently similar programmes having a wider range of outcomes than would be perhaps anticipated or, certainly, desired. It is very hard to identify early the good ones, and we need to address that challenge.
The Office of the Third Sector initiated last November a three-year programme on measuring social value, bringing together academics and others to develop a social return on investment tool, which may be useful. On the specific issue of securing additional finance for early intervention programmes, however, my hon. Friend the Member for Nottingham, North sketched out some thoughtful proposals, and I should welcome the opportunity to sit down with him and others later in the year to discuss them. He has been pursuing the issue for a long time, and we know that spending now can release savings in the future, but can we devise mechanisms that somehow realise those future savings by spending now?
I am aware of the interesting work by the Council on Social Action regarding the idea of a social impact bond, but I am aware, too, of the difficulties with value for money—especially at a time of tight fiscal constraint. I welcome the exploration that my hon. Friend is leading, however, and I am encouraged by the ideas that are emerging. I am grateful to him for his generous remarks about the Treasury’s role, and our watchword is value for money for the taxpayer. We need to build the evidence base, so that everyone concerned is clear about the value that is added by any proposal. Understanding cost savings and benefits will be the key to extending the preventive approach, and we need to work hard on building up evidence about the circumstances in which such interventions should be targeted.
We have had an excellent debate, and I am grateful to all who have contributed. It is clear that early intervention has great potential to deliver exceptional returns.
Milton Keynes/South Midlands Sub-region
I am glad to have the opportunity to bring forward a further debate on this issue, which is vital not only to my constituency, but to every constituency in Buckinghamshire, Bedfordshire and Northamptonshire. If the Minister was in any doubt about the level of parliamentary interest in today’s debate, those doubts might be laid to rest when he sees that attending with me are my hon. Friends the Members for South-West Bedfordshire (Andrew Selous), for Northampton, South (Mr. Binley), for Wellingborough (Mr. Bone), for Kettering (Mr. Hollobone), for Mid-Bedfordshire (Mrs. Dorries), for North-East Milton Keynes (Mr. Lancaster), and for Buckingham (John Bercow). I am also glad to see the hon. Member for Milton Keynes, South-West (Dr. Starkey) here today.
I want to begin with two points on which I think that we can find agreement between all parts of the House. First, there will be a need in the Milton Keynes/South Midlands area, as in the rest of the country, for new housing and associated development. My hon. Friends and I all meet at our constituency surgeries people who are in housing need. We are all familiar with the demographic trends that are driving an increase in the number of households, even in circumstances where the population is relatively stable. They include the breakdown of marriage and partnership; the welcome fact that elderly people now live longer and can live independently for longer than in the past; and the wish of young adults to live independently of their parents and on their own—before they settle down and start a family—for more years than used to be the case. We are aware, too, of the impact on housing demand of what the Secretary of State for Communities and Local Government described at the weekend as the “free-for-all” in Government immigration policy, which present Ministers allowed, whether or not they realised what they were doing.
Secondly, we can all agree that where new development takes place, it should be of good quality. I would be happy to endorse the aspirations set out on behalf of the Government by none other than the then Deputy Prime Minister in the 2002 White Paper, “Sustainable Communities: Building for the Future,” in which the issues we are debating arise. The Government stated in that White Paper:
“Where new and expanded communities are needed,”
the Government would wish
“to ensure that these are sustainable, well-designed, high quality and attractive places in which people will positively choose to live and work.”
I happily endorse the Government’s statement that part of their response to the housing challenge would be:
“To address public services and infrastructure needs to enable the new communities to function.”
My hon. Friend mentioned sustainability. Does he agree that for any community to be truly sustainable, it must have the support of local people? That is probably one of the key points that many of our constituents feel strongly about. They feel that housing is being imposed without any genuine local concerns being taken into account.
I completely agree with my hon. Friend. Where I differ from the Government is that I believe that their policy has been flawed in two critical respects. First, they have been wrong to rely on top-down planning and targets imposed from the centre on local areas. In the 2002 White Paper, four areas in south-east England were singled out for large-scale development, when the evidence is that there is housing need and need for regeneration in many different communities in the south-east. I would have had far more sympathy for a Government policy that accepted that almost every town and village could cope with some additional housing, in each case on the scale and of a design that was acceptable to local people and in line with the needs and ambitions of that area.
Powers were removed from local authorities by the Government and given either to the Secretary of State or to unaccountable and remote regional agencies. Even when we get down to the process of public consultation on individual sites, which is happening in Aylesbury at the moment, we find that the rules that the local authority are obliged to follow in carrying out that public consultation—the timetable, the sort of questions that may be asked, the considerations that will be regarded as relevant and legitimate when a decision is taken—are determined by central Government and not by the representatives of the local communities themselves. Hanging over all that has been the threat, made clear in conversations between Government officials and local authority representatives, that if local authorities do not toe the line, the Government will step in, as they have done in Milton Keynes, and remove altogether the planning powers of the local authority in respect of growth and hand them over to a panel appointed by the Secretary of State.
I am sure that the hon. Gentleman would wish to clarify that although it is true that parts of the new growth areas currently have little or no housing and are under the planning control of the Milton Keynes Partnership, there is also significant growth planned within the existing urban area of Milton Keynes, which is under the control of the council, as a local planning authority. In addition, of course, the local planning authority sets the overall parameters within which all development is taken forward.
The hon. Lady is making the best fist that she can of defending a policy that I suspect is pretty unpopular among voters in her city. Although she asserts that it is up to the local authority to set the framework, the changes to legislation that her Government brought in require local authorities to ensure that their own plans comply with both regional and central Government guidance, or else those plans will be considered invalid and can be struck down by the Secretary of State. The problem with this top-down approach is twofold: it has led to bad planning decisions and, as my hon. Friend the Member for North-East Milton Keynes pointed out, it is utterly corrosive of public confidence in the democratic system that allows its voices to be heard.
One of the most depressing experiences that I have had in my constituency when dealing with this issue over the past six or seven years, has been talking to local people who say, “What is the point of responding to a public consultation? What is the point of deciding which candidate I support in a local authority election? At the end of the day, all these decisions are being taken up in Whitehall; our voices are not heard, public consultation is a pretence, local democracy is meaningless.” I say to the Minister that irrespective of which political party happens to be in office at any one time, whether locally or nationally, it is not a healthy state of affairs when we see public cynicism about democracy growing in this way.
My hon. Friend is absolutely right to highlight the prevalence of concern among the public and council leaders. I am sure that he would agree that both David Shakespeare from Buckinghamshire county council and John Cartwright from Aylesbury district council have consistently taken an extremely pragmatic and responsible approach to development, but given that Roger Tym and Partners estimates that £770 million of infrastructure investment is required in Aylesbury alone, does he think that local councillors are legitimately concerned that thus far, only a little in excess of £30 million of such commitments has been garnered?
I am mindful of what my hon. Friend has said and I shall try to develop that theme at greater length later in my speech.
We need a change away from centrally driven, top-down planning. I welcome very much the commitments given by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) that a Conservative Government would return powers over housing and strategic planning to elected local authorities and would free local authorities to revisit housing plans and spatial strategies that have already been imposed.
The second flaw in the Government’s general approach is their failure to plan adequately for jobs, infrastructure and public services alongside the new homes. Even if we set aside our disagreements about the sustainable communities plan, the housing targets and the designation of four areas of south-east England for particularly large development, and look at the Government’s implementation of policy in their own terms, we find that that failure is a massive flaw which threatens to deliver communities that are far from sustainable. In the Milton Keynes/South Midlands area as a whole, the target is to build some 220,000 new homes. For Aylesbury Vale, the target is about 27,000 new houses by 2026, of which 16,800 will be in and around Aylesbury itself. Many hon. Members want to get in on this debate, so I shall touch briefly on three subjects that are relevant to my constituency: calculation of housing targets, provision for jobs and planning for infrastructure.
On the calculation of housing targets, I urge the Minister, even now, to look again at the change of policy that the Government introduced a couple of years ago which stopped local authorities from counting development on windfall brownfield sites as part of their housing targets. Historically, those gains were important in Aylesbury, and a consequence of the policy is that pressure for greenfield development has increased. The policy has also provided central Government with a way surreptitiously to increase housing targets without actually announcing and taking responsibility for such decisions. That, too, corrodes public respect for the political process.
I would also ask the Government to look seriously at the provisions in planning policy statement 3 for local authorities to maintain a continuous five-year supply of deliverable sites. Paragraph 71 of PPS3 states that local authorities that do not have a five-year supply of housing land should “consider favourably” applications for planning permission. The inference one draws from that is that the absence of supply should trump other planning considerations that would normally make a scheme unacceptable.
The problem at present is that the impact of the recession means that sites that would perhaps have been given planning permission, or on which the local authority would certainly be willing to grant planning permission, are slipping out of the five-year deliverable timetable. In Aylesbury, work on many existing development sites has stopped, starts have been delayed, and where building continues the building rate has slowed down because of the impact of the recession.
Unless the Government are prepared to look at their rules on five-year supply, there is a risk that under paragraph 71 other sites outside the local plan—speculative applications—will succeed, not because they are sensible or sustainable but because market conditions mean that the local authority is unable to deliver the five-year supply required by the Government. We end up with the five-year supply rule clashing with the Government’s declared commitment to sensible planning and sustainable development.
Secondly, on jobs, there is at present a net outflow of some 20,000 people every day from Aylesbury Vale. Those people are commuting to workplaces elsewhere. Yes, Aylesbury is linked to London, and, yes, as the hon. Member for Milton Keynes, South-West knows, I very much support the efforts that have been made to get agreement on the orbital rail route, including a link from Aylesbury to Bletchley, but Aylesbury’s travel-to-work area covers a wide circle which includes east Hertfordshire, Bedfordshire, Milton Keynes, Northamptonshire, Oxfordshire, Berkshire and west London. Commuting to work involves a large number of car journeys.
Therefore, to cope with new development without adding dramatically to traffic congestion, Aylesbury will require many more jobs. Frankly, the target approved by the Government of one job for each new house is inadequate. These days, most couples work or, in the present economic climate, both halves of a couple wish to get a job and work regularly.
May I point out to my hon. Friend that one job for every new house appears to us in north Northamptonshire as rather generous? The Government targets for north Northamptonshire are for 52,100 new houses by 2021 but only 47,400 new jobs.
My hon. Friend makes his point persuasively.
The message from Government officials to local authorities about, for example, the future of the Aston Clinton Road business park in Aylesbury is that Ministers are not terribly interested in jobs—that all that really matters in keeping Ministers happy is meeting targets for house building. If that means giving up land earmarked for employment to housing, so be it. If the Minister in his reply is prepared to get up and put it on the record that that is not what the Government want, I would welcome such a statement.
Let me turn finally to infrastructure, because the provision of infrastructure and good public services is, of course, intimately connected with hopes to persuade employers to locate to the areas designated for large-scale new residential growth. Firms will move to Aylesbury only if there are good transport links for their suppliers and customers, and decent public services and a good quality of life for their employees.
There has been no shortage of warnings to the Government about the need to plan for infrastructure. The Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions stated clearly in its eighth report, which was published in 2003, that it was concerned by the absence at that stage of a clear strategy to deliver infrastructure and public services to match the Government’s housing targets, and that it looked forward to such a plan being published at an early opportunity.
The independent study by Roger Tym and Partners in 2003 stated that £8.3 billion would be needed for the whole of the Milton Keynes/South Midlands sub-region. Aylesbury Vale Advantage, the local delivery vehicle, currently estimates that the capital costs—I stress that these are the capital costs only—for Aylesbury Vale district alone are about £827 million. That bill is not for the general capital plans of the district council but for development that would be needed that is directly attributable to the growth required under the Government’s housing targets. I should add that the £827 million excludes anything needed as a result of the proposed expansion of Milton Keynes into Aylesbury Vale district.
So far, some £50 million has been received or pledged in Government grant or developer contributions. That money is welcome, but it is a small proportion of what is needed. For example, the latest £9.4 million that the Government have awarded to Aylesbury Vale will have to be spent on securing an improvement in electricity capacity, which is essential if any development is to take place, but which is not even part of the £827 million bill identified by Aylesbury Vale Advantage.
As the recession has begun to deepen we have seen a fall in section 106 contributions, and negotiations between authorities and developers have been getting steadily more difficult. If we are honest, we have to face up to the fact that the Government money has now been spent. I find it difficult to see where the Government will find the funds to deliver even a fraction of what will be needed, not just in my constituency but in those of my hon. Friends and other hon. Members. It is no good saying, “Oh, Buckinghamshire county council can borrow more; it is a floor authority”—meaning that it is unable to take advantage of supportive borrowing because it cannot afford to make repayments on capital borrowed—
I am grateful to my hon. Friend, who has been generous in giving way and is, as always, making a compelling case. Does he agree that an additional concern is that population expansion necessarily has major implications for the local health service, assessments of which are robust and on the public record? In particular, does he share my concern—I think he does—about the known time lag of up to 18 months between the arrival of new residents in the area and the processing through the system of the necessary capitation payments?
My hon. Friend is spot on. It is no good saying to developers who might want to build a house or to residents who might want to move into a newly built house, or to an employer weighing up whether to move into our area rather than another one, “Don’t worry. In a few years’ time, if you are lucky, and depending on the Chancellor of the Exchequer and the council tax rates, you might get your new GP clinic, your new road or your new school.” If we are going to have sustainable communities—the Government have declared that that is their ambition—such facilities must be available at the start. Those new facilities must also be introduced in a way that gives some advantage to the existing residents of the town where new development has taken place. I am hearing about incipient resentment from Aylesbury residents, who think, when they hear talk about a new school or community centre being planned for the area to be built, that they will be stuck with buildings that are in need of repair, with the new residents getting priority over those who have lived in the town for many years.
Transport undoubtedly comprises the biggest share of the £827 million bill, which includes £182 million for roads and £100 million for rail—sums that are needed directly for growth. Aylesbury is already heavily congested at peak hours. The Minister has visited more than once, and if he has arrived at peak hours he will have had to queue on one of the approach roads to the town centre. The A41 Tring road is already designated as an air quality management area because exhaust pollution levels there breach the limits set by European law.
It is not just the impact of extra houses in Aylesbury about which I am concerned, but the impact on traffic in my constituency of development in Bedfordshire, Milton Keynes and other neighbouring districts and counties. The latest estimate is that the planned housing growth will result in an increase of 38 per cent. in the number of trips made by car in Aylesbury between the base year of 2005 and the end of the housing programme in 2026. That is not just a predict-and-provide figure obtained through extrapolating current trends. That 38 per cent. increase assumes that there would be an increase of more than 90 per cent. in walking and cycling trips during that period and an increase of 70 per cent. in bus and rail trips. Even if those shifts to other modes of transport take place, the consequence of the Government’s housing plans—unless something serious is done about road and rail infrastructure—will be that, by the mid-20-teens or 2020s, congestion at off-peak hours in Aylesbury will match the congestion that my constituents see in peak hours today. I can think of no greater disincentive for new businesses to think of locating in Aylesbury and, frankly, no greater incentive for businesses currently located there to consider whether they ought to leave and locate elsewhere.
I could mention a long list of items. For example, some £12.7 million is needed by the NHS for four health centres and a community hospital; £28.5 million is required for further education facilities; £123 million is needed for two secondary, eight primary and one special school; £6.5 million is needed for sports pitches; £5.5 million is needed for new residential places in day-care centres and other provision for social care; and £2 million is required for children’s play areas. There is not time to go into detail about those sums, but it is important that the Minister is aware of the scale of the need.
How will these facilities be provided? The housing targets have been created by the Government, so it is fair to ask the Minister what the Government’s plan is for sustainable communities and for the infrastructure and public services that they set out in 2002. A year after the White Paper was published, the Office of the Deputy Prime Minister published a document entitled, “Creating Sustainable Communities. Making it happen: Thames Gateway and the Growth Areas,” which was the Department’s first progress report on the sustainable communities plan. On page 5, that report stated
“that the Government was not simply committed to the delivery of additional housing”,
but that the plan
“was committed to creating communities. That principle has underpinned our work...We want employment growth to accompany housing growth. We”
“to make the growth areas attractive places in which to live and work…Alongside housing growth, we are planning for the delivery of schools and healthcare provision, for public transport and good quality public spaces, for quality and high design principles…The projects we have identified for funding in all four growth areas reflect that commitment, though this is only a start.”
They thought that they had made a start in 2003. However, from what I have seen over the past seven years, and from what I see when comparing what the Government are planning for and delivering with those aspirations, there has been a sorry failure to deliver on those promises. I look to the Minister to explain what the Government’s strategy is now and whether they have abandoned those pledges on truly sustainable communities.
I agree with the three points that the hon. Member for Aylesbury (Mr. Lidington) outlined at the beginning of his contribution. First, there is a need for new housing in all the areas represented by all the hon. Members in this Chamber. Secondly, that housing should be of good quality and, particularly, of high environmental quality. I am proud that the Oxley Park development in my constituency has eco-houses of the highest quality, which have been occupied extremely quickly both by people buying them and through social ownership or social renting. Thirdly, housing needs to be provided in parallel with the necessary infrastructure underpinning it.
Although we are talking largely about physical infrastructure, I also want to stress what I describe as the soft infrastructure, which needs to accompany new communities and has always been developed in Milton Keynes, which is not yet at the end of its first development plan, a small proportion of which is still being completed. When I talk about soft infrastructure, I mean the social organisations, including voluntary organisations and other social infrastructure, that have to be developed as a community is enlarging and, in the case of the areas that the hon. Member for North-East Milton Keynes (Mr. Lancaster) and I represent, becoming considerably more diverse.
From there, we diverge, because I want to talk largely about housing need. What I say will be very different from what others say because Milton Keynes is very different from the rest of the Milton Keynes and South Midlands area. Milton Keynes is a hugely successful and highly dynamic new town or new city. During the previous recession, growth continued in Milton Keynes, albeit at a slower pace, obviously, but at a faster pace than in the rest of the country, and I am confident that Milton Keynes will also weather the current recession, and that growth will continue.
The concept of growth has been embraced by, for example, the Milton Keynes economy and learning partnership and has been set out in its economic vision, “From New Town to International City”. Milton Keynes looks forward to being the 10th largest city in the UK in 2030. The superior facilities that we have—for example, our shopping centre, theatre and art gallery—surpass innumerable other facilities and are enjoyed by many of the constituents of the hon. Members ranged on the Opposition Benches. I except my colleague in the other half of Milton Keynes, the hon. Member for North-East Milton Keynes (Mr. Lancaster), because they are our joint facilities, but the constituents of all the other hon. Members are happy to come and enjoy those facilities. We all benefit from the fact that we have a superb regional theatre. We are happy to welcome the constituents of the other hon. Members to enjoy those facilities and help to make them economically viable and hugely successful.
As I said, we are different from the rest of the Milton Keynes and South Midlands area. In particular, we are different because we have more jobs than houses. Therefore, many members—one third—of the work force in Milton Keynes live outside the constituency and commute in. I accept that many of those live outside the constituency by choice. They may prefer living in a village to living in an urban area. However, a great many of them live outside the constituency because sufficient housing is not available in Milton Keynes, and they are priced out. I have innumerable examples of individuals who have moved from the north of England and got a job in Milton Keynes, but who have not been able to get a house in Milton Keynes because they cannot afford it, so they come as far south as they can, which is not as far as Milton Keynes. If more people who already work in Milton Keynes could live in Milton Keynes, the effect on the environment would be much reduced and the quality of life of those individuals would be improved.
I am listening with great interest to the hon. Lady’s argument about how Milton Keynes has been such a success under the Labour Government. Why, then, is unemployment in her constituency 47 per cent. higher now than it was in 1997?
Unemployment figures have increased by more than the south-east average just over the past few months, and the local economic partnership has been looking into the detail of why exactly that has been occurring. It appears that it has largely to do with the laying off of temporary and casual workers, and the suspicion is that it has to do with the downturn in the retail sector, which is very large in Milton Keynes. Clearly, the issue needs examining, but notwithstanding that, it remains the fact that we have more employment than houses available for the people who work in our area. The hon. Member for Aylesbury, in opening the debate, talked about his recognition of housing need. I want to put some flesh on the bones of the feedback from my constituents about what that housing need means.
First, there is a wholly inadequate supply of social rented housing in Milton Keynes. Therefore, many of my constituents live in overcrowded, unsatisfactory conditions. They are forced into the private rented sector, where they may pay very high rents to live in relatively poor conditions. My local council, because of the shortage of social rented housing, has a housing allocations policy. I understand how it arrived at that, but it is wholly unsatisfactory. If someone needs housing in Milton Keynes and is accepted as statutorily homeless—no one else gets access to social rented housing—they go to the council and the council will say, “Fine. You are statutorily homeless. We have an obligation to house you. What have we got available today?” That is essentially what the council says. If it does not have a social rented property available for the person, it offers them a private rented property and if they do not take it, the council has discharged its statutory obligation.
The consequence of that is, first, that the allocation of housing is seen as arbitrary—it is just a matter of luck as to what is available on the day a person turns up. That leads to a corrosive view in the community that some people are given an unfair advantage, as it is essentially a lottery. Secondly, most people are placed in the private rented sector. Those properties may be okay, but the accommodation is not stable and individuals are moved frequently. That has a hugely detrimental effect, particularly on families with children. Children are moved from one school to another at frequent intervals, on top of the instability that has already been caused by the fact that they were homeless. Hon. Members will know from their own constituencies that major causes of individuals becoming homeless are relationship breakdown, redundancy and sudden illness and disability that lead to household income loss. Those households are already experiencing huge stress. On top of that, they are put in unsatisfactory private rented accommodation.
Alternatively, people may be fortunate enough to get into social rented property. Housing association properties of good quality are still being built, but the council’s own property stock has been eroded by the right to buy to such an extent that very many of my most disadvantaged constituents with families are placed in the two or three blocks of council housing that are least favoured. They have to share wholly inadequate, overcrowded accommodation that suffers high levels of condensation and damp with various other people who have severe social problems, often associated with alcohol addiction, drug addiction or other unfortunate behavioural characteristics. That compounds the problems that those families have.
I am laying it on thick because it is incredibly important that when we talk about housing need, we spell out what the housing need is and what the consequences are of not meeting those housing needs. I have talked about social rented housing, but of course the—
This is actually on the broader point, to be honest. The hon. Lady talked about being very keen to listen to her constituents’ views. Will she take this opportunity to explain to her constituents and mine why she feels so strongly that they should not be trusted to help to deliver the future of Milton Keynes; why they should not be trusted to vote in local elections to allow Milton Keynes council to be the sole planning authority to decide the future of our city?
I do not accept the hon. Gentleman’s premise and I will not be turned away from what I believe is the priority for my constituents—homes for them and for their young people—and led into a spurious argument that simply plays into his political agenda, which I am sure will be well expressed by the massed ranks of Tory MPs present.
I accept what the hon. Lady says about making her own case—who could deny it?—and she is making an important point about housing need. I do not cavil at that. One can argue the toss about overall numbers, but she is making a persuasive point. The question is this: does she accept that, even if that need is precisely as she describes, the development required to meet it still has to be sustainable? That raises the critical question of the level of infrastructure and who pays for it.
I absolutely accept that point and I will come on to the issue of infrastructure, but I suspect that everyone else will talk about that and I want to redress the balance and focus the debate on people, including families, children and elderly people, who need decent housing. All of us have access to decent housing—more-than-decent housing. It is important that I speak for the people in my constituency whose voices are far too often not heard in this argument. In my view, the emphasis is disproportionately on people who already have houses and is not on those who do not. The others who need new housing are those who could afford to buy if they were given some help, particularly young people.
Two big groups in my constituency frequently want to speak to me about housing. The first is those young people in work—hard-working, thrifty families who cannot afford to buy a house, even in Milton Keynes, without the additional help of shared ownership or other schemes. The Milton Keynes development corporation—it is a quango established to deliver housing—has been at the forefront of developing shared ownership. The tenure of shared ownership is therefore well understood by people in Milton Keynes, and it has made a greater contribution to the housing stock in Milton Keynes than it has in most other areas. However, young people who want to buy their own homes are not able to do so because the house-building rate has not been fast enough, and because there is a total lack of liquidity as a result of the bigger problems caused by the housing market during the boom and the opposite.
The second group is the parents. They have homes, but they do not have the additional capital to help their children acquire a home. They are distressed because their sons and daughters are not able to get a home before starting their families; and many are distressed because their sons and daughters are still living with them, plus or minus various partners and small grandchildren, whom they love dearly but, to be blunt, with whom they would rather not have to share their home.
Those two groups continually say that more houses are needed. Some may say, “We need more houses, but not next door to mine.” However, they all say that more houses are needed, that they need to be built more quickly and that they should be affordable.
I welcome the steps that the Minister has taken thus far to keep housing building going at the planned rate. Those measures have partly been successful. I cite the HomeBuy Direct scheme. There are a number of examples in my constituency of partnerships between Government and developers that allow homes to be offered for sale with equity loans of 30 per cent. Those schemes are working, but they are not big enough. We need more.
I also welcome the initiative taken by the Government’s HomeBuy agency, which has been a catalyst in Milton Keynes. It held a special event late last year at which information and advice was given to people on exactly how to make best use of the various schemes—My Choice Homebuy and others—to help people buy their own home. I know that 909 households living in Milton Keynes registered with those schemes, and that in mid-November, only a few weeks after the event, 30 had already successfully used the Homebuy scheme. I welcome those schemes, but they are not enough. I urge the Government to do even more to ensure that we continue house building in order to meet housing need.
I said that I would talk about infrastructure. The original Milton Keynes development plan was successful because housing and infrastructure were planned from the start, and were delivered in parallel.
Indeed, Mr. Martlew.
The Milton Keynes Partnership pioneered the infrastructure tariff—the forerunner of the Government’s community infrastructure levy—which funds development in parallel with housing. For example, we have the biggest school building programme in the country. The Members for both Milton Keynes constituencies have opened new schools to meet the pupil need. Those schools were built before all the houses in the catchment areas had been built; they then grew as the areas grew. We have also had massive investment in our health system. We have had new GP surgeries and dental surgeries—the hon. Member for North-East Milton Keynes recently opened a dental surgery—and the hospital has been expanded.
That is very different from the situation in 1997, when I was first elected. Health provision then did not meet the needs of the population. However, it has now expanded, as has the annual funding, and it is now more or less in balance with population growth. None the less, it needs to continue growing as the population increases.
There is also the transport infrastructure. I think particularly of the improvements to junction 13 on the M1 and the extra platform at Milton Keynes Central station. Regrettably, some of the gilt was taken off the latter because of Network Rail’s mess-ups in January, when the west coast main line completely seized up. Infrastructure should improve in parallel with the increase in housing. The Milton Keynes Partnership tariff allows for forward funding, so that the infrastructure can be put in place despite the fact that the housing development takes place later; we know that the developers are committed to topping up the fund.
I suggest that the rest of the region gets its act together, as has Milton Keynes. All local councils should draw up proper infrastructure plans and work with developers and the Government to ensure that those plans are achieved.
As for the kind words of the hon. Member for Aylesbury about the east-west rail link for Aylesbury, I am more than happy that Aylesbury is getting its station paid for. However, I hope that Aylesbury Vale district council will commit itself to approving the housing that it is supposed to, to help fund those railway improvements; it should not say that it wants the infrastructure but not the housing. We need to have both in parallel; just as we need infrastructure with the housing, so we need the housing with the infrastructure.
I congratulate my hon. Friend the Member for Aylesbury (Mr. Lidington) on his wonderful opening address. I shall keep my remarks short, out of respect for my colleagues who also wish to contribute to the debate.
North Northamptonshire, of which Kettering is but a part, is the biggest single growth area outside London. Under the Government’s plans, the population is expected to grow to more than 370,000 by 2021—the equivalent of a city the size of Bristol. There are meant to be 52,100 new houses and 47,400 new jobs. More than 2,100 new houses were built in 2006; under the Government’s projections, that is set to rise to 3,700 a year in the coming years, although I doubt whether it will be achieved. That growth is faster than in the Thames Gateway or Milton Keynes. The lesson from north Northamptonshire is that the infrastructure is not being provided as promised.
For instance, the A14, a Highways Agency road that runs through my constituency, is a key part of the growth of north Northamptonshire, yet we are still awaiting a Government announcement on what is to happen to that road. When first elected to Parliament in 2005, I started asking questions of the Department for Transport about when the Highways Agency would publish its plans for improving the A14 near Kettering. I was told by the Transport Minister in October 2006 that he had asked the agency to finalise the A14 Kettering bypass widening options study by early 2007. Here we are in early 2009, and still no announcement has been made.
The A43 between Kettering and Northampton is the most dangerous, busiest and most congested road in Northamptonshire. The right hon. Member for Kingston upon Hull, East (Mr. Prescott) axed it from the road improvement programme in 1999, and it is still not to be found in a funding scheme. Indeed, references to dualling in the north Northamptonshire core spatial strategy have since been removed.
Kettering urgently needs an eastern bypass if it is to accommodate an increase of one third in its housing stock by 2021. However, the north Northamptonshire core spatial strategy states that
“transport modelling indicates that this road is not essential for development”.
I say to the Minister that that is absolute nonsense, and that Kettering will simply grind to a halt unless it is provided.
The rail service from Kettering to London has been scaled back, and the rail service from Kettering to Leicester has been halved since the new timetable was introduced in December. Unemployment in north Northamptonshire stands at 5,300, compared with 4,000 in 1997, and has risen by 50 per cent. in the past year alone. The Minister’s sustainable communities plan for my constituency and north Northamptonshire will not be sustainable unless it enjoys popular support. This is a wonderful opportunity for the Government to use the background of the recession to pump-prime investment into north Northamptonshire by introducing infrastructure projects. That will help to address local concerns about the scale of the development.
[Mr. John Cummings in the Chair]
I leave the Minister with one request. This week will he please get in touch with the Department for Transport and insist that early in this new year an announcement be made about how the Government will improve the A14, because unless that is done, the Government simply will not get the extra houses that they require in north Northamptonshire and my constituents will remain extremely concerned about the lack of infrastructure.
I, too, shall be brief, like my hon. Friend the Member for Kettering (Mr. Hollobone).
The hon. Member for Milton Keynes, South-West (Dr. Starkey) does not have a monopoly of concern about housing need—it is shared by all my colleagues in the Conservative party. We want to do something about it, which is why I backed plans by South Bedfordshire district council to build well over 10,000 houses in my constituency. That would have more than met local housing need in my area and provided additional houses for her constituents and others in the region. However, to ram into those four areas around London a super amount of growth, without the necessary jobs, transport links and other infrastructure, is unacceptable. That is the broad concern shared by my colleagues in the Conservative party.
I shall localise the issues to my constituency as quickly as I can. In Leighton Buzzard and Linslade, there is intense irritation that before the Minister’s boss, the Secretary of State for Communities and Local Government, is a proposal for 900 houses to the west of Linslade, in the constituency, I think, of my hon. Friend the Member for Aylesbury (Mr. Lidington). I had to write to the Government office for the south-east in Guildford about this matter. I wish that the Minister could have come with me to a public meeting that I attended where several hundred of my constituents turned up on a cold December evening to express absolute amazement at the proposal, which is not even favoured by the committee that the Government set up. It was against it, but the Government changed the rules that they themselves put in place. Will the Minister speak to his boss and kick that proposal into touch forthwith?
Leighton Buzzard is a mediaeval market town, which the Minister was kind enough to visit on 27 March last year. He might remember that we could not drive around the whole town—our minibus had to turn back, such was the traffic. My hon. Friend spoke about the traffic in Aylesbury, too. We cannot expand mediaeval market towns indefinitely, with later additions and central road systems that cannot cope with ever more outlying estates. Many people in Leighton Buzzard travel to shop in Bletchley, because it is quicker to get there than to drive from one side of Leighton Buzzard to the other. We are not creating a sustainable community, but simply adding to carbon emissions. We might be adding to retail profits in Milton Keynes, but we are not doing much for the economy of Leighton Buzzard or for my constituents. We do not have enough local jobs. My area has lost about 500 jobs over the past seven years. A genuinely sustainable community should have a balance of houses and jobs, so that people can work locally. They might have caring commitments for sick or elderly relatives or young children. Not everyone wants to get up very early and catch a train in the morning, if they can get a job out of the area. We need to think about that.
A proposal has also been made for an extra 200 homes off Stoke road in Leighton Buzzard. I have similar concerns about that as about the west Linslade urban extension. We also desperately need a bypass to the north of Dunstable—the other major town in my constituency—to which two objections were raised recently: one was that the Government had not yet decided whether they would widen the M1 or use hard-shoulder running. I think that a decision is imminent and that something can happen quickly. After that, we can deal with the second objection: air quality. I understand that the new chief at the Highways Agency has a practical proposal to deal with that. If we can nail those two issues, we can get on and announce that road. In 2006, the then Secretary of State for Transport, the right hon. Member for Paisley and Renfrewshire, South (Mr. Alexander) said that the road would be the first priority for any slippage on any scheme in the east of England. I intend to see that commitment to the House honoured.
Furthermore, Houghton Regis—the third smallest town in my constituency—is desperately short of even the most basic facilities. Football players and bowls players have to use sports clubs that lack even the most basic facilities. We were told that there would be no new houses without the infrastructure—that is the reality at the moment—but we want to deal with local housing need. We are generous people, so we will make a contribution to the needs of the wider area, but it must be sustainable. When the Minister came to my constituency last year, he said that he would take issue with allegations that the Government were forcing local authorities to provide housing—I made a note of that when he spoke to Leighton-Linslade town council—but that is not how that is seen locally. It is seen as a denial of local democracy. I echo everything that my hon. Friend the Member for Aylesbury said about that. That denial is dangerous. The power of the ballot box has to matter and be able to change things locally. People do not see that happening, and the Government should really be worrying about that.
Thank you, Mr. Cummings. I wanted to focus on the growth forecast for Milton Keynes and the premise on which that growth is predicted, but given the time restrictions, I shall instead focus my comments on one area in particular. First, however, I should like to thank my hon. Friend the Member for Aylesbury (Mr. Lidington) for securing this debate. I have attempted to do so many times, but I am delighted that he succeeded, because his speech was incredibly erudite and compelling. He did a far better job than I could ever have done.
I shall talk about the 2,000 residents of Aspley Guise in Bedfordshire. So that the Minister understands where I am coming from, I shall describe Aspley Guise: it is one of the most beautiful areas in Bedfordshire. It is a village made up of Tudor cottages; it was mentioned in the Domesday Book; it is surrounded by green-belt land; it is a chocolate-box village, which are traditional in England—the kind of village that one imagines when talking about the typical British village. It also has a unique, supportive and strong community. People in Aspley Guise very much identify themselves with the area and the village, and it is an honour to be a Member for a constituency with such a strong community.
Aspley Guise is threatened with being subsumed by the expansion of Milton Keynes and becoming part of what is, or will be, a modern city. Obviously, the 2,000 residents of Aspley Guise object strongly to that, for a number of reasons, one of which is that they fear losing their identity and culture. They worry that the village will cease to exist and become part of a modern city. Those 2,000 residents are hugely concerned about that.
I can do no better than put it in the terms expressed by councillor Fiona Chapman. Imagine that someone has a big house and wants to build an extension and that, rather than applying to have it built in their own garden, they apply to build it further away in the garden of someone else’s smaller house. That is how the residents of Aspley Guise feel. They believe strongly that the expansion of Milton Keynes should take place within the boundaries of Milton Keynes and that a good area of green-belt land should surround Aspley Guise as a buffer between Bedfordshire and Milton Keynes expansion. They feel very strongly for a number of reasons. They understand that the 224,000 proposed new homes were based on a predicted jobs growth of 192,000. That was not realistic even then. As we know, Milton Keynes had just 0.1 per cent. economic growth at the time, when the rest of the region was benefiting from a growth of 0.6 per cent. Today, David Frost from the British Chamber of Commerce spoke about the dire situation for economic growth and businesses in the UK.
Aspley Guise residents and I should like to ask the Minister why he thinks that we need completely to subsume a village on the basis of economic growth forecasts that we know will not be realised. I shall finish quickly, because I know that my colleagues want to speak. As the Minister has been an assiduous and efficient chairman of Milton Keynes and South Midlands, will he come to Aspley Guise to look at the area and meet the people and listen to their concerns? Unlike the previous ministerial visit, I guarantee that it will be a calm, beneficial and warm meeting. So, when the Minister is in the Milton Keynes or the Bedfordshire area, will he do us the honour of paying us a visit, so that he can see for himself the area that will be destroyed by the growth of Milton Keynes?
It is a great pleasure to follow my hon. Friend the Member for Mid-Bedfordshire (Mrs. Dorries). I also want to congratulate my hon. Friend the Member for Aylesbury (Mr. Lidington) on securing this debate and on making such a powerful speech. I totally agree with all the comments made by my hon. Friends. I should like to mention a different area, however. In some respects, it is the elephant in the room that has not been discussed.
In Wellingborough, unemployment is 40 per cent. higher than it was in 1997. As my hon. Friend the Member for Kettering (Mr. Hollobone) said, we have 52,000 new homes proposed and a road structure that is incapable of dealing with what we have at the moment. The issue that concerns me is the migration from Europe. In one year, in the most up-to-date figures that I have from the Office for National Statistics, 7,000 migrants moved into Northamptonshire to stay for more than one year. We do not have the jobs at the moment. As I said, unemployment is 40 per cent. higher than in 1997. We did not have the boom, but we have certainly had the bust.
If politicians of the main political parties do not discuss the problem of migration, it could lead to extreme parties coming in. Unfortunately, I now have the British National party in my area. It makes the simple case that people cannot get jobs because foreign workers have taken them. That is untrue and unfair, but there is a danger that that view will be developed and that reasonable people will vote for such parties because we, as mainstream politicians, are not discussing the issue in great detail. As there is already a huge amount of unemployment in my constituency and in other parts of Northamptonshire, we face a real danger if this migration continues.
It may well be that the migration does not continue. The Government have already said that up to 30 per cent. of the new homes will be for migrant workers. If those migrant workers are not going to come because the jobs are not here, do we need that growth in housing? Presumably, we could cut the figures by 30 per cent. We must discuss that issue in a calm way; otherwise, we will allow extremists to come in and do great damage in Northamptonshire.
I thank my hon. Friend the Member for Aylesbury (Mr. Lidington) for obtaining this debate, which is very well timed and presents a valuable opportunity to hon. Members who are affected by the sustainable communities project. I pay tribute to the Minister, who was good enough to visit Northampton. He showed a great interest and willingness to listen and to learn. We are lucky to have such a man, and it gives us hope. [Interruption.] It will be a pint later, Iain.
May I make one simple point? The Government’s plans for the number of houses have gone to the wall. The overview of the infrastructure needs has never been properly created, and we have never really understood where the money is coming from to pay for that infrastructure. We have talked quite sizeably about money from the private sector. I can tell the Minister that whereas prepared land cost £1.4 million an acre 12 to 14 months ago, we would be lucky to get £600,000 an acre now. That means that there is not the leeway within land values to provide the sort of infrastructure that the Government hoped they would be able to provide from that source. I plead with the Minister to review that particular project now, as it impacts on Northamptonshire and on the constituencies of my colleagues here today. Much of the original thinking, which was not very deep at the time, has gone out of the window because of present circumstances. Those circumstances will have a sizeable impact for the next 20 years. By that I mean the time frame that we were talking about in the original Rooker report in our part of the world.
My second point concerns rail transport. After I have discussed it, I will sit down, Mr. Cummings, because I appreciate your concerns, too. We are on a secondary loop link from London. There is no doubt that much of the rationale for the sustainable communities policy as it was originally envisaged was to solve housing problems in London and the south-east. Our projected indigenous population growth is very small. We assume that most of the incoming people will be from London and the south-east, which means that the rail connection is vital.
The Minister will have read of the problems that we have had over a lengthy period, which have been heightened over the past two weeks. I am told that more than 100 trains have been cancelled since the new timetable came in at the beginning of December, that there are not enough drivers to man the trains, and that the new link from the north-west is not performing as it should do. All of that is impacting dramatically on the present population getting to their jobs in London. When we have the sort of increase that the Government are projecting, the problem will be added to. I urge the Minister to consider that issue specifically within the overall review of the sustainable communities project for which I am calling. If the Government do not deal with the totally changed set of circumstances, they will create insoluble problems for the future for local planning authorities, urban development corporations and the delivery vehicles. I want a total rethink of the matter. I am not talking about the need for extra housing, but about how we are going to put into effect the sustainable communities programme that the Government wish to proceed with and which we wish to help with, provided it is not too much of a burden for the constituencies and the areas in which we live.
The direction of housing growth at Aylesbury is the subject of continuing debate, not least at local level, and notably between advocates of the southern arc on the one hand and the eastern arc on the other. The Minister will be relieved to know that I am not inviting him or expecting him to intrude into private grief on that subject today, or necessarily at a later stage. I want to make one simple plea to him.
Whichever arc goes forward as the accepted option, there is a consensus locally—I am looking with eager anticipation in the direction of my hon. Friend the Member for Aylesbury (Mr. Lidington)—that the eastern link road will be essential to the sustainability of the development. Buckinghamshire county council has secured between £3 million and £4 million towards the design work for that road. It is not unreasonable for the county council to look for further finance, both because of the centrality of the road and on account of the fact that Aylesbury Vale, at the request of the Government, is undergoing a proportionately larger expansion than, I think, any other area of the country. I look forward to the good will and positive commitment of the Minister.
I congratulate the hon. Member for Aylesbury (Mr. Lidington) on securing this debate and I congratulate all hon. Members who have spoken—they have made the case on behalf of their constituents and raised their concerns. I shall try to be brief to allow the Minister as much time as possible to respond.
The hon. Member for Northampton, South (Mr. Binley) said that the Minister was lucky. I am sure that he feels very lucky to have the pleasure and responsibility of responding to debates of this nature, but it feels like groundhog day because there are so many in Westminster Hall. There is a consensus that there is a massive unmet housing need, but there is frustration—not only in the region that we are talking about, but the whole country—because the process is the wrong way round. Local people do not feel that they have an opportunity to speak or that what they say will have an impact on the outcome. We end up having so many debates in Westminster Hall on such matters because they provide the only opportunity for Members to raise their constituents’ points.
The organisations that take the decisions lack accountability, but so does the process. I have spoken in such debates before, as colleagues have, and tried to gain an understanding of the process and to see how we could make an impact on it, but we have debates when the regional Minister is absent, which leads to questions about their role in decisions. At least, in this case, we have the chairman of Milton Keynes and South Midlands inter-regional board—the Minister—responding to the debate, so there might be some accountability. However, in all too many cases the right Minister is not present.
As the hon. Member for Milton Keynes, South-West (Dr. Starkey) highlighted, Milton Keynes is different from other parts of the region, which raises the question why the region is carved out as it is. There are major accountability issues, which should be tackled if the Government are keen for people to buy into the process. Hon. Members are more than prepared to make the argument for meeting the housing need, but without accountability it is difficult to counter cynicism, even if the Government show willing.
The issue is important because people are concerned that the sustainability of their communities is being undermined. They are worried about the impact that changes will have on their communities from a social perspective; the hon. Member for Mid-Bedfordshire (Mrs. Dorries) made that point well. The proposed changes will not only mean that communities grow, but that they will change altogether, so the matter needs to be treated sensitively. The hon. Member for Milton Keynes, South-West made a valuable point when she spoke of the need to ensure that we have soft infrastructure. We need to support growth, but we should not undermine what exists. The danger is that the process does just that.
The major environmental issues in the south-east were raised, such as access to water, and the impact of building on greenfield sites and of not protecting the green belt. Because of the planning process, developers have every incentive to develop sequentially, and we can guarantee that the greenfield sites will be the first to be identified. That needs to be addressed.
Ultimately, everything boils down to the economic sustainability of the plans. Hon. Members have already questioned the numbers of jobs and houses that will be generated, and we are now living in a completely different climate. There are Government announcements day after day on what they are doing to tackle the economic downturn, so I am at a loss about the continuing denial about housing numbers. The fact is that the Government’s target for house building is not being met. The jobs are not there, and the construction industry faces huge difficulties, and the Minister and the Department for Communities and Local Government must adapt to reflect that changed world.
There are some practical things that the Government could do. The new situation does not mean giving up on meeting housing need, because if anything the need for social housing will be even greater. What are the Department’s plans to meet the changing need? For example, if properties are not being developed in the private sector, and if there is greater need for social housing, what can it do to meet the new need? Could the Minister show some flexibility on the percentage grant for social housing, and can any money be brought forward? How will he respond to the Taylor report, which focuses on building economically sustainable communities, and not simply massive urban extensions, to safeguard the sustainability of existing communities as well as provide for future housing need? Practical steps could be taken.
I would like the Minister to say that he is prepared to listen to the views of the constituents whom hon. Members have represented today. Will he provide a reassurance that the targets will not be set in stone, to be pushed forward regardless of those views, in the light of the changed economic realities with which we now live?
It is a pleasure to serve under your chairmanship, Mr. Cummings. I congratulate my hon. Friend the Member for Aylesbury (Mr. Lidington) on securing this timely and important debate, and on his assiduous and consistent advocacy for his constituents. We have discussed such things on a number of occasions, regarding a number of areas, in the past few years, including the M40, the provision of health services in Milton Keynes and funding. As Yogi Berra, the American sports coach, said, it is déjà vu all over again. It is regrettable that the hon. Member for Milton Keynes, South-West (Dr. Starkey) filibustered for 18 minutes on the tangential issue of housing in Milton Keynes, rather than address the substantive issue, when so many other hon. Members wished to represent their constituents. I hope not to repeat what my hon. Friends said, but I congratulate them on making the effort to represent their constituents eloquently and determinedly in the debate.
I hope that the Minister heard what was said about planning policy statement 3 and the sleight of hand that is being used to encourage more development on green belt land. The Campaign to Protect Rural England estimates that up to 75 per cent. of housing could be built on green belt land in the Milton Keynes South Midlands area. I also hope that he is thinking about transport infrastructure, and specifically about the 2003 independent study by Roger Tym and Partners, to which my hon. Friends the Members for Buckingham (John Bercow) and for Aylesbury referred. He will know that the South East England Development Agency estimates that £25 billion is needed to finance infrastructure planning as a consequence of housing built under the sustainable communities plan. That will not be funding by section 106, the Milton Keynes supplement or planning gain supplements—I am talking about roads, schools, clinics, bridges, hospitals, community centres and so on.
Energy and water infrastructure are also important. When the Minister speaks, he could address the fact that the current constitution of the regulatory system militates against long-term planning for facilities by, for instance, EDF, in the Aylesbury area, as my hon. Friend the Member for Aylesbury has said.
It is ironic—one is entitled to be cynical—that at its launch in July, the Secretary of State said that
“the White Paper provides real and practical ways to put communities in control…Politicians have a contract with those that they serve – that contract now needs to be rewritten to ensure that the needs of real people are taken more into account.”
That simply has not happened in the past few years.
In the Local Democracy, Economic Development and Construction Bill, the Government missed an opportunity and have failed to right the wrongs of too much central control. They had an opportunity to transfer power downwards to local people but, instead, they have junked regional assemblies, and intend to vest unprecedented planning powers in the hands of the regional development agencies. As we know, buried in the small print of the Bill is the capacity to create new, unelected economic and transport quangos, which is in effect a green light for yet more stealth taxes on our constituents.
The Bill also strips away the last vestiges of democratic accountability at regional level by giving major housing and planning powers to unelected appointees of regional development agencies with reserve powers for Secretaries of State to revise or completely disregard regional plans as they see fit. That is an example of Labour’s Stalinist quango state of unelected party elites. It is not a way to proceed—[Interruption.] I am glad that the Minister is easily amused.
I wish to mention some other specific areas that my hon. Friends have mentioned. Obviously, the regional spatial strategy is a flawed process. It is unaccountable, distant, and undemocratic and corrodes people’s faith and trust in the planning system, which is bad for local democracy. My hon. Friend the Member for Wellingborough (Mr. Bone) made an apposite point on the impact of migration from the EU and elsewhere. He is absolutely right that it is incumbent on mainstream parties to talk about those issues and their impact on the delivery of public services. Otherwise, the extremists in our midst will make hay and undermine the system, which is what they intend to do.
My hon. Friend referred to the point made earlier by my hon. Friend the Member for Wellingborough, and I can tell him that the British National party is leafleting this week in Leighton Buzzard on that issue. I say to the Minister that this is a real threat that we need to be serious about.
Thank you, Mr. Cummings. I will not be too much longer. I will not be able to develop all of the points that I would have liked to make, but I reassure hon. Members today that a Conservative Government would abolish regional spatial strategies, facilitate their post facto review, get rid of the floor density and housing targets, legislate for proper consultation at the local level with local councils and other stakeholders and revisit the flawed Barker report, which is the basis of the Stalinist housing targets across the south-east of England and the rest of the country, which are crazy, especially in light of the economic downturn in the housing market. We will also revisit the projections of the Office for National Statistics on demography and population change. A Conservative Government will give power back to local people and restore local civic pride.
I begin by welcoming you to the Chair, Mr. Cummings, and wish you and other Members a happy new year. I must also apologise to you, Mr. Cummings, as I am afraid that I have three Adjournment debates today and you will be seeing rather a lot of me. This debate was a good start. It was a high-quality, well-argued debate, so perhaps I will now bring the average down.
I congratulate the hon. Member for Aylesbury (Mr. Lidington) on securing the debate. Future growth of housing is of critical importance across the country, and it is essential that we have a good, mature debate and a positive and constructive conversation about the right way forward. As he said in his speech, I visited Aylesbury in October in my position as chair of the Milton Keynes and South Midlands inter-regional board, and I was pleased to see the progress that had been made there. The growth of Aylesbury is important to the success of the sub-region, and a successful sub-region there, given its location, is important to the entire country. Its strategic location and its close proximity to London and to world-class universities such as Oxford and Cambridge, as well as the centres of higher education in its own area, means that it is well positioned to play a leading role in the UK economy as we move forward in the 21st century. It is important that we facilitate growth and development in that regard. I was pleased to see a report—my hon. Friend the Member for Corby (Phil Hope) mentions this to me on a regular basis—by Oxford Economics claiming that Corby, which is in the north of the sub-region, was the best placed of any town in the country to weather the current market conditions.
I know from my visits throughout the region, which I really enjoy, and my meetings with people across the sub-region, that there is huge potential and ambition in the area. Council leaders and delivery partners have great ambitions for the future of the area, and the important vision of how growth can benefit existing and future residents was captured in today’s debate by my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey).
Three themes have been raised in the debate, and I would like to address all of them. The first is the need for more homes, and not just any old places, but quality homes built with local consultation. I absolutely agree with that. When I last visited Milton Keynes, I went to the Oxley park development and was really impressed by its sustainability and the high-quality environmental materials used. I hope that that model can be applied across the rest of the country.
The second theme relates to jobs and how we cannot have a mismatch between housing and jobs. Again, I agree with that approach. The third theme relates to the key element of infrastructure, which has to be well planned in conjunction with local needs. That is the key theme, because we cannot think of any of those aspects in isolation. The location of homes needs to be thought about in close relation to the location of enterprise and employment areas, and the infrastructure and public services to help service those areas are absolutely key. The approach suggested by Opposition Members today runs contrary to the concept of the benefit of planning and of bringing everything together to ensure that we do not think of things in isolation.
I will now look at the need for more homes. On his website, the hon. Member for Aylesbury states that almost everyone agrees that new homes need to be built, and it was pleasing to hear every hon. Member who has spoken today state that that is important. There is a broad national consensus about the need for more housing in the country, but I think that my hon. Friend the Member for Milton Keynes, South-West was right in saying that people genuinely believe that we need more housing, but want it built nowhere near them, and we need to combat that. I was disappointed to see that the hon. Gentleman had put his name on the petition on the No. 10 website to say no to new homes in his areas, because without new homes people will have to move away from where they grew up in order to get a roof of their own.
There is a question of affordability. The ratio of house prices to average salaries in his area of Aylesbury is nine, meaning that house prices are nine times the average salary. That is not sustainable in any sense of the word. I would hate to see a situation in his constituency in which people who grew up in Aylesbury were forced out by higher prices. We need to address that by providing more affordable housing and more social housing. That is vital for combating that real social problem.
The past 30 years have seen a 30 per cent. increase in the formation of households but a 50 per cent. drop in house building. There are 200,000 people in the south-east on waiting lists for affordable housing and over 37,000 on waiting lists across the Milton Keynes/South Midlands sub-region, with over 2,500 in Aylesbury. We simply cannot afford to ignore that, because it is of absolutely vital importance. Good, long-term planning is key. Yes, it should be done in consultation with the local community, but it is vital if we are to address those real concerns.
I do live in the real world and recognise that the circumstances in the housing market at present are obviously very difficult, but there is no evidence to suggest that those long-term demographic changes are altering at all. Thankfully, we are all living longer, so we have an ageing population. Given social changes, such as more single people living alone, those trends will continue. I suggest that failure to act and plan for more housing now would simply store up problems for the future and that that would be irresponsible. That is my response to the hon. Member for Falmouth and Camborne (Julia Goldsworthy), who questioned whether we should look at changing the targets. Given that the statistical evidence behind those targets is very robust and that it includes long-term demographic factors, we have to do it. Yes, in the current economic climate it will be difficult to get back up to the necessary speed and trajectory, but it has to be done, and the Government are up for the challenge.
An awful lot was discussed in the debate, and unfortunately I do not have the time to address all of it, but I want to mention one last point before concluding, and that is the point about planning and not looking at things in isolation. I absolutely agree with the sentiments expressed by those on the Opposition Benches on how housing must be thought about in terms of long-term planning, together with employment and infrastructure, but some of the suggestions made today, not least by the hon. Gentleman, run contrary to that. I think that he was trying to say that we should return to emphasising windfall development and ad hoc planning so that, when a site becomes available, we embrace it for planning, and I think that that view is wrong. It is not the right approach. Long-term planning for the future, bearing in mind the various pressures and circumstances, are absolutely vital. The ambition in the sub-region for—
Affordable Housing (Durham)
The Minister will be aware that I have been concerned for some time about the supply of affordable homes in Durham. I thank him for speaking at the seminar that I held a year ago in Durham to raise the profile of the issue. It would have been nice if that seminar in September 2007 had led to a change in attitude by the Liberal Democrat council and if it had taken more seriously since then the issue of improving the supply of affordable homes, particularly family homes. Alas, I must report that that is not the case.
It was therefore surprising to me and a great many of my constituents that although an Audit Commission report published in August 2008 acknowledged severe weaknesses in Durham’s strategic housing services, it commended the city for its affordability record. Initially, I thought that the local paper must have been reporting incorrectly, and when I read the Audit Commission report, I thought that the city council must have been building secret housing estates somewhere in Durham of which I as a local resident was simply unaware. The truth, of course, was not as sinister as that, but only just. Nobody in their right mind could think, based on the evidence available, that Durham city’s record in recent years of providing affordable homes could be good, let alone effective, so I decided to investigate further.
I hope to put the record straight and flag to the new unitary authority in Durham, which will come into being this April, the appalling housing legacy that it will inherit from Durham city council. I am speaking today about the lack of affordable housing, but the record on council house repairs and the decent homes standard is probably even worse. Council tenants are definitely not a priority or a concern for the Liberal Democrat council. I place the blame for poor housing services firmly on the lead councillors, not the hard-working council staff who work in difficult circumstances to deliver the best service they can. However, even the Audit Commission report listed that service as only fair, giving it one star. At one point, it referred to the council as one of the worst performing in the country.
The issue of affordability was of huge importance when I raised it before the credit crunch, but now it has particular pertinence, as the downturn in the housing market is leading more people to seek affordable and affordable rented housing. In its brief to me for this debate, Shelter noted a rise in the number of people on housing registers in the area. It also noted that 272 households are currently homeless in Durham and that repossession claims had risen 3 per cent. from last year. Data from the National Housing Federation state that Durham’s rate of new homelessness, 5.2 per 1,000, is the highest in the county and the third highest in the north-east. Waiting lists for social housing are also longer than the national average. Affordability has always been an issue in Durham, but the NHF reports a massive affordability ratio of 8.4 per cent., the highest in the county.
The Audit Commission report said that Durham had developed 300 properties for sale and 60 for rent with £19 million from the Durham Villages Regeneration Company partnership—a joint initiative between the local authority and a private company—that had been channelled into social housing or community projects.
There are two big issues to address. First, the figures for housing completions in the Audit Commission report are quite modest, but the claim that DVRC invested substantially in social housing led me to examine the social rented housing figures further. I started with the statistical appendix to the housing strategy for 2006, which I eventually found after some hunting on the website of the Department for Communities and Local Government. Interestingly, the appendix showed no new local authority dwellings for 2005-06, and only 36 planned for registered social landlords.
I was bewildered to discover that the DCLG table for social rented homes in Durham showed 130 homes built that year; hence my view about secret housing estates. I thought that somebody must be building houses somewhere that none of us could see materialising. I contacted local RSLs to ask whether they had built houses that no one knew about. Of course they had not, so I went back to the tables. How come completions were zero and 10 respectively for 2003 and 2004 but 130 for 2005?
I remembered that not long after I was elected, I had opened a new housing complex built by an RSL for postgraduate students at Durham university, so I inquired at DCLG whether that could be the problem. Apparently, the DCLG figure inaccurately recorded that student accommodation as local authority-owned housing that would contribute to social renting locally, but the DCLG figure also appeared to have been inflated by the inclusion of some DVRC housing. That is especially the case for 2006-07. DCLG figures for that year show 240 completions for social rented housing in Durham. Now I really was in the realm of secret housing estates. That time, of course, the figure was totally incorrect. The sole reason for it was that 184 of the houses built for sale by DVRC had been listed as local authority-owned and presumed by DCLG and others to be social rented housing.
I have asked that the figures be corrected, and to be fair, the Government have issued new ones. Instead of 88 completions for 2005-06, 184 for 2006-07 and 99 for 2007-08, the figures now read: zero, zero, zero. For social landlords, they now read 178 for 2005-06, of which 120 were purpose-built student accommodation units, 55 for 2006-07 and 23 for 2007-08. The picture is broadly similar to that in other local authorities in the region, but worse than in Easington and Sedgefield—hardly the exemplar that Durham claims and the Audit Commission apparently confirmed.
The corrections, however, do not appear to be in the public domain, as recent figures that I received from Shelter still listed local authority completions last year at 99. Will the Minister ensure that DCLG displays the correct figures on its website? It is important not simply because it will show that the Audit Commission was wrong but because the uncorrected figures lead to an inaccurate view of how much affordable housing is available in Durham.
The situation is complicated further by the fact that Durham city claims that a number of houses built for sale by DVRC are affordable. I have always been fair to the city, and have accepted that that is undoubtedly the case. However, it has not been able to provide me with purchase costs for houses sold or the number with an equity share arrangement attached. How we are supposed to confirm that those houses are in fact affordable is anybody’s guess. When I last looked at some DVRC properties, they were on the market for almost £200,000, which is hardly affordable.
I do not know how the figures came to be inaccurately recorded, but I do know that the Audit Commission should have picked up that discrepancy in the social rented figures before I did and I would now like to ask that the report is corrected, with proper figures implemented and a reasonable assessment made of Durham’s record on affordable housing, given this new information.
I am not knocking the DVRC model. It was established by the previous Labour administration and if it had been used correctly, rather than funding the pet projects of the Lib Dems, it could have provided more affordable homes in Durham. Indeed, the former chief executive of the city council confirmed that at my housing seminar. However, DVRC has not provided much affordable housing in recent years, and as we know, much of what was provided was for sale at market rates.
In fact, the situation is even worse than current completion figures suggest. DVRC developments that could have carried an element of affordable housing did not do so. Consequently, I believe that the claim stated in the Audit Commission report that the money from DVRC was used to support social housing needs to be investigated further, in order to substantiate it. Therefore, not only was the DVRC model distorted by the Lib Dems but they failed in many instances to apply local housing policy H12, which required affordable housing to be a percentage of housing developments above a certain size. Indeed, when I first tackled the Lib Dem council on this issue, it did not seem to know that it had a policy that it should have been implementing since 2004.
I want to ask the Minister why the Government office seems to have no powers to insist that affordable housing policies are adhered to when planning permission is being granted. There have been a number of recent developments, including the development at Byland lodge, where the planning application was in breach not only of local policy H12 but of planning policy statement 3.
The second issue arising from the Audit Commission report is that it concluded that by August 2008 DVRC had built 360 houses, but the Lib Dems claim that DVRC has built 1,000 new homes. I am still working on that discrepancy.
In the few minutes that I have left, there are some other issues that I wish to raise briefly with the Minister. Where new houses have been built in Durham, little attention has been given to the PPS3 requirement to build mixed and sustainable communities. Indeed, PPS3 identifies exactly what the problem has been in Durham. It states that too often in recent years developers have focused on building one and two-bedroomed flats at the expense of family homes and it states that planning must acknowledge the need for larger houses for children, with space for children to grow and play. That has not happened. Often where houses have been built in Durham—which has mostly been in the villages—population densities are high, and when considering planning permission, no thought has been given to the impact on local schools or infrastructure, or the need for play facilities and green space. I know that anyone living in Durham will concur with these comments and there is now a growing fear that it is too late to restore balance and families to some of our city-centre communities.
There appears to have been a breach of PPS3, and the failure of the planning department in Durham city to enter into section 106 agreements for affordable housing on DVRC and other developments is also a breach of Government guidance. It would appear that no monitoring system exists to ensure that local authorities abide by national planning guidance and the Government office seems to have no powers to intervene.
I know that the situation in Durham is further complicated by the demand for student housing, particularly in the city centre, but the university and its students are vital to our city and they are positive aspects of Durham and the Durham experience. We need sensible planning and housing policies that allow a mix in some areas of student and more general housing and also an understanding of how the needs of students and long-term residents can be accommodated. It does not help either group if too many areas of the city lose family or general needs housing completely to student landlords.
I hope that the Government will use the review that they have carried out of the licensing of houses in multiple occupation, and their private sector review, to enable local authorities to have more powers to plan neighbourhoods, so as to prevent a preponderance of one type of housing tenure developing where that does not make sense locally. It is also necessary to align the definitions of HMOs in planning and housing law, and to give more powers to councils to control the siting of HMOs and how they are managed. I will make representations to the Minister about this issue in due course.
Lastly, I come to the issue of the economic downturn. If we are not to lose the excellent construction skills that we have built up over the years in Durham, it is absolutely essential that we get house building moving again. I hope that the new unitary authority can learn from the mistakes of Durham city council with regard to the lack of affordable housing and the mismatch between housing need and supply. I ask the Minister to use the review of the housing revenue account to bring about a change in policy, to enable local councils to build social housing themselves or to enter partnerships with RSLs to achieve that aim with the Homes and Communities Agency. I would also like the new unitary council or RSLs to take over housing in the private rented sector that is currently vacant for social rented use.
Beyond that, however, there is a need for a level of planning that I hope will appear in the new local development framework that the unitary authority is now preparing. That framework should concentrate on the need to produce mixed communities that have the infrastructure in place to support them and where the needs of different household types and incomes can be accommodated. This important strategic thinking in terms of planning was entirely absent from the council run by the Lib Dems. Instead their greed for money from private development allowed such development to take place at any cost to the local community and often at enormous cost to the quality of development in Durham. Durham deserves better and I hope that the Government can help the new council to do better once the economic conditions for development return. In particular, I implore the Minister to set up a meeting between the new council and the Homes and Communities Agency soon, to see what can be done.
I want to begin by congratulating my hon. Friend the Member for City of Durham (Dr. Blackman-Woods) on securing this debate. Durham is only down the road from Hartlepool, my own constituency, as is your constituency, Mr. Cummings. I want to see Durham do well. A lot of people from Hartlepool look towards Durham as a sort of ceremonial centre for our area, and I think that it has a great place in the north-east of England.
I want to pay tribute to my hon. Friend. We had many extremely constructive debates and she contributed immensely during the Committee stage of the Housing and Regeneration Bill, which is a key piece of legislation that will help to tackle the problems that she identified in her excellent speech today, particularly regarding the creation of new affordable housing.
My hon. Friend has a long-standing concern about the lack of affordable housing in her constituency. It seems a long time ago now, but I was extremely pleased to attend the seminar on housing that she organised, to talk about housing in Durham and what we can do to help her constituents. I am disappointed that progress has not been as great as she would have liked, because of the incompetence of the local authority. However, I am hopeful that, as we move to a new framework for the local authority in her area, we will see a lot more progress.
The issues that my hon. Friend has raised, both today and in the past—the need for more family housing, strong mixed communities and sustainable home ownership for lower-income households—absolutely chime with what we are trying to do nationally. My hon. Friend’s chairmanship of the all-party group on balanced and sustainable communities, which examines the issues of sustainable communities and particularly the problems associated with studentification, shows that she is leading the debate on those issues nationally and helping to frame policy.
I agree absolutely with my hon. Friend that, fundamentally, none of these problems can be resolved without a major increase in the supply of housing. That means an increase in the supply of all types of housing, including homes for private rent and ownership, but an increase in the supply of affordable housing is absolutely critical, as she has so rightly said today. She has also quite correctly mentioned the recent economic downturn. In this crisis, which is the biggest global financial crisis since the 1930s, that goal of building more housing undoubtedly becomes more difficult to achieve. However, it also means that the supply of affordable housing becomes more important than ever.
Lending to first-time buyers has fallen by more than half, and they are therefore finding it more difficult than ever to get on to the property ladder. For those people, affordable housing represents a truly affordable and sustainable way of getting the safety and security of homeownership without having to overstretch themselves. Therefore, I want to spend the remaining time that I have left to describe some of the measures that we are putting in place to help to achieve the long-term goal of increased house building and what implications they may have for my hon. Friend’s constituents.
We set the framework nationally and provide supporting funding, but my hon. Friend is right to point out that local authorities have a critical role to play, through PPS3 and other policy statements, in securing delivery and making sure that the homes that local residents need are built. She has mentioned the Audit Commission report, following its February 2008 inspection of affordable housing. The report gave her local authority a one-star, “fair” rating and identified uncertain prospects for improvement. As she has said, the people of Durham deserve better, and I hope that we can all work together to achieve that. With her strong leadership in this field, I hope that she will continue to champion speedy delivery for housing and to work with local partners to make that happen.
My hon. Friend has expressed concern about whether progress has been fast enough, and she has mentioned the establishment of the new unitary authority. This is a good opportunity to revisit those issues and a chance to re-establish a shared vision and an agreed way forward. Frankly, the people of Durham have been let down by the Liberal Democrat council, and the new unitary authority provides us with greater ambition. When the Liberal Democrats were running the council, they failed to take into account the huge potential of my hon. Friend’s constituency. I think that the whole region will get behind Durham’s ambition to become the European city of culture, which shows that Durham will once again start to punch above its weight. I know that my hon. Friend will play a key role in that.
Let me describe the context for delivering affordable housing nationally. We have provided more than £8 billion for investment, planned by the Homes and Communities Agency, over the next three years, as my hon. Friend will know, because she helped to establish the agency through her work on the Housing and Regeneration Bill. We anticipate that that will deliver about 70,000 new affordable homes, including 45,000 homes for social rent, each year until 2010-11.
Registered social landlords operating in the Durham city council area have so far been allocated £5.1 million-worth of funding through the three-year programme, which we expect will deliver 110 homes. Overall, schemes in County Durham have been allocated £12.3 million, and we need to consider whether to refresh that funding. Durham city council has so far received the highest allocations of all the boroughs within County Durham.
As my hon. Friend and I have both said, there is serious concern about how the programme and related ambitions will be affected by current economic conditions, but she will know that we have acted speedily to bring forward £550 million of the £3 billion investment for spending on social housing, so that we can help people now. That will provide real help to those facing housing shortages and problems, and it will stimulate activity in the construction industry that is vital to our region. That will help us to get the homes that we need, and I am confident that it will provide work for construction firms and will keep people in jobs.
Flexibility is a key word at the moment. We are looking for imaginative ways to continue to increase the supply of affordable housing. We have given the HCA greater flexibility on the grant rates that it pays to its investment partners. We are still looking for value for money, but we are balancing that consideration against the need to ensure that homes are built. The new rent to homebuy scheme will give registered social landlords an ongoing rental stream for reinvestment and a potential capital receipt later.
My hon. Friend has discussed the need for local authorities to be able to build houses. I agree. She will be aware of the measures in the Housing and Regeneration Act 2008 that allow councils to do that. Local authorities can now bid for social housing grant, so that they can add directly to the contribution to affordable housing that RSLs make.
We are taking this opportunity to buy new, unsold stock directly from developers. Since May, we have spent £160 million on 4,800 new homes for affordable housing. Given that the scheme has been running for only a few months, there has been great progress. Substantial further funding is available for other suitable homes at the right price.
Will my hon. Friend clarify whether local authorities such as Durham city council—or, indeed, the new unitary authority in April—may apply to the Government for grants? May they apply in partnership with RSLs to buy houses or apartments that might be surplus in the private rented sector for use in the social rented sector?
The short answer is yes. We will shortly be consulting on provisions in the 2008 Act as to how local authorities can build new housing. That will be welcomed by all hon. Members across the House, because local authorities have a key role to play. One part of that is providing strategic delivery by establishing what housing, particularly affordable housing, is needed in their areas. The Liberal Democrat council has let my hon. Friend’s constituency down in that regard. Another part of the local authority’s role is providing a direct delivery route. That flexibility is important, and I hope that she will work with me, the HCA and others to achieve it. The key watchword is flexibility, and I shall continue to keep her and the House updated on developments.
Ambitious and proactive local authorities are in a strong position to help the construction industry and the local economy in tough times. My hon. Friend holds an extremely strong position in the region through her role as a deputy regional Minister. We need to keep in mind the bad news that we have had in our region in the past few days about job losses at Nissan. Local authorities have a key role to play in that regard. People will be frightened and concerned about the economic conditions and their continuing ability to afford a house. The Government are keen to address that, so that we can minimise repossessions as far as possible and provide housing that we are all proud of.
The key point is that we need to work together in partnership. I have mentioned my hon. Friend’s role as a deputy regional Minister and her strong position. Regionally, an action plan is being developed to tackle the effects of the credit crunch, and I look forward to seeing the results. We have a strong regional team at the HCA. The new regional director, Pat Ritchie, has asked me to facilitate a meeting with the new unitary authority and the HCA, and I am happy to do so. I would welcome my hon. Friend at the meeting to facilitate further ongoing work to ensure that affordable housing is provided in Durham.
Our goal is not only to build more housing, but to help more first-time buyers to take advantage of that housing. With that in mind, we have expanded and introduced schemes to help people to take their first step on to the property ladder. The HomeBuy Direct scheme gives people an equity loan worth up to 30 per cent. of the purchase price of a new build property on selected sites. The loan is offered jointly by the Government and developers, and there is no fee for the first five years. Some £400 million has been available nationally for the scheme, which we anticipate will help up to 18,000 people, while supporting house builders. I am pleased to say that my hon. Friend’s constituents might be among the first to benefit from the scheme, as there are seven sites within Durham city and another 15 throughout County Durham that offer homes through HomeBuy Direct. A number of other options are on offer, such as shared ownership schemes, rent to homebuy and subsidised rents. The key is flexibility, and the idea is to give people choice, so that they can choose the tenure and the scheme that best suits their circumstances.
We have primarily been discussing affordable housing, but that forms just one part of our plans for housing growth. The south and east Durham areas have recently been assigned as growth points and are joining the £600 million programme for the first time. That funding is being made available for the essential infrastructure, such as shops, schools and transport, that makes communities tick. My hon. Friend will know, as the chair of the all-party group on balanced and sustainable communities, that we cannot just plonk housing down without regard to the wider area, but her council has, unfortunately, done that in the past. We need to ensure that housing is properly planned to have a good, balanced community that has high-quality public services. Her constituency will benefit from a better marrying up of supply and demand through Durham.
I conclude by thanking my hon. Friend for the high-quality debate that we have had. We can work together with the Department, the HCA and the new unitary authority, which seems to have a more ambitious approach than the Liberal Democrat incompetence of the past, to ensure that we have the affordable housing in Durham that her constituents deserve.
Police Funding (Gloucestershire)
It is a pleasure to serve under your chairmanship, Mr. Cummings. I know that the Minister for Security, Counter-Terrorism, Crime and Policing, the hon. Member for Gedling (Mr. Coaker), has been taken ill because his office has had the courtesy to phone my office. I wish him the best of health and hope to see him back soon. I am pleased to see that the Under-Secretary of State for the Home Department, the hon. Member for Tynemouth (Mr. Campbell), will be replying instead.
The background to this debate is that the Gloucestershire constabulary faces a tough future in the next couple of years. The funding formula allocation that it has been given by the Government rises by just 2.5 per cent. in each of the next two years, which is right at the bottom of the floor. The specific police grants that the constabulary gets have been frozen, except for the one that funds police and community support officers. That means that the overall settlement is lower still at just 2.1 per cent. Given that the inflation faced by police forces, which is largely outside their control, is running at somewhere between 3 and 3.6 per cent., that represents a real-terms cut and a significant shortfall in funding.
However, council tax payers in Gloucestershire are already hard pressed and we cannot afford to have a large increase in the police share of the council tax precept. Gloucestershire county council has delivered a record low council tax increase and I hope that the police authority will keep its low as well. For the Minister’s benefit, it is worth saying that the county council is working in close partnership with the police and has funded 63 new officers specifically to go out on the beat in Gloucestershire. That is welcomed by the people whom I represent.
Gloucestershire historically gets a poor deal for police funding from the Government and it is in the bottom six police forces for funding per head—£58 a head versus a national average of £81 a head. Even so, the spend per head by the police is about average for England and Wales. The circle has been squared by a higher than average council tax precept, and local people face an unfairly large proportion of the burden because the Government have refused to fund Gloucestershire police fairly. Will the Minister explain why Gloucestershire receives just 70 per cent. of the national average funding per head for its police services, which puts an extra burden on hard-pressed council tax payers?
In November, as I said, the Government confirmed the formula grant allocation rise of 2.5 per cent. for Gloucestershire for the next two years. In response to a request for information for this debate, the chief constable confirmed in a letter to me that
“with the exception of the neighbourhood policing grant”—
the one that pays for PCSOs—
“all specific grants have been frozen…resulting in the total level of Government funding (formula and specific) only increasing by 2.1%.”
That compares to an average increase of 2.8 per cent. in England and Wales, with metropolitan forces seeing an average increase of 3.1 per cent. Yet again, it seems that the figures show that the way the formula works out means that the Government are penalising rural, as opposed to urban, parts of the country.
As I have said, total Government grant will increase by just 2.1 per cent, and my chief constable has said that the cost growth faced by the local police force is about 3.6 per cent. Consequently, that is about 1.5 per cent. above the increase in Government funding. Even if we are generous to the Government and use their estimate of cost growth—the gross domestic product deflator—that still shows cost increases running at more than 3 per cent. Why do we get such a bad deal from that funding formula in Gloucestershire? One of the principles underlying the funding formula averages out the differences between different parts of the police authority area. In a recent article in Policing Today, which I am sure the Minister has read, Gloucestershire’s chief constable, Dr. Tim Brain, explains:
“This principle rewards areas of uniformity in population distribution, density and relative wealth. If…your police authority area is characterised by strong contrasts”—
as is Gloucestershire—
“between partnership areas of high population density and other areas of low density, you tend to lose out.”
When the formula was introduced it was recognised that it was not perfect, so a damping mechanism of floors and ceilings was implemented to ensure that the impact on places such as Gloucestershire was reduced. In their Green Paper, “From the Neighbourhood to the National: Policing Our Communities Together,” the Government confirmed their plans to remove those floors, and the Minister with responsibility for policing has confirmed in the same language used in the Green Paper that they will be removed in due course. He said that it is the Government’s
“intention to move to full implementation of the funding formula at the fastest pace that is compatible with ensuring the financial stability of all police authorities.”—[Official Report, 9 December 2008; Vol. 485, c. 36W.]
Will the Minister explain exactly what that means? Given that most police authorities that benefit from the floors think that their removal will mean a significant reduction in their expenditure, it does not sound as if doing so would be financially stable. However, if that is the case, we will never move to a position where the floors and ceilings are removed. If the Government’s intention is to remove the floors and ceilings, either they believe that it will not have a significant impact on police authorities—I shall be grateful if the Minister will confirm that that is the Home Office’s view—or they are moving ahead regardless of the consequences. The answer to the parliamentary question to which I have referred is simply a tautology and the way in which it is currently written is meaningless.
In a letter to me last July, the chief constable said that
“there can be no doubt that if the financial implications of the Flanagan report and the green paper were followed through there would be a substantial grant cut for forces like Gloucestershire.”
The Minister will know that Dr. Brain leads on financial matters for the Association of Chief Police Officers and is therefore something of an expert on these matters. Will the Minister confirm whether the Department agrees with the chief constable’s analysis of the financial impact on our county’s police force of removing the floors? Is it the case that, as Dr. Brain states in his article,
“it is not at all certain that the current formula is any longer an accurate reflection of the relative needs of authority areas”?
Does the Minister think that the funding formula used to allocate funding accurately reflects the relative needs of different areas?
On some specific funding areas, the security grant is a good example of the Government’s requiring the local police to undertake certain responsibilities but not funding them properly. Between 2005 and 2007, the security grant for royal protection was cut by 9 per cent., but the same demands are still being made of the police. Perhaps the Minister could explain why that is the case and what local services he expects the constabulary to cut. Alternatively, does he expect local council tax payers to pick up the funding for what are essentially national security responsibilities?
Another example is funding for PCSOs. The Government grant provides only 75 per cent. of the funding required, which leaves the constabulary—the council tax payer—to find the funds elsewhere to meet that Government policy. I remind the Minister that, at the last election, the Government promised that 24,000 new PCSOs would be introduced during this Parliament. However, they reneged on that commitment and cut funding by £70 million in 2006. Most of the funding that was left went to the Metropolitan police, which gave local police forces a real problem. In summary, the cost of delivering Government-defined goals is increasing, but funding has been frozen. The Government have demanded that initiatives are followed through, but they have failed to maintain appropriate funding for them. As a result, other services must be cut or further burdens will be placed on local tax payers.
At the same time as funding is being held down, costs are rising. Things are particularly difficult at the moment. The Government have set police pay awards nationally at 2.6 per cent., which is above the rise in the grant given to Gloucestershire, and the crime fighting fund, which is supposed to fund the cost of police officers, has been frozen since 2004. That places a further burden on the police that is completely outside their control. Considering the impact of increased fuel prices and the increased price of imported products procured by the police force because of the weak pound, the chief constable’s estimate is that the police are facing an increase in costs at a rate of about 3.6 per cent., which is 1.5 per cent. higher than the funding that they receive from central Government. That gap has to be made up somehow.
The poor settlement might tempt the police authority to go for the easy option of sharply increasing the council tax precept to cover the costs imposed on our police force by the Government. That would be the wrong thing to do. In this particularly tough economic climate, with household budgets under pressure, it is essential that council tax increases are kept to a minimum, and the police authority must play its part.
I am very grateful to my hon. Friend and constituency neighbour in Gloucestershire for giving way. He makes a cogent case about the financial difficulties that the police face. Does he think that there is a danger in that financial stringency, whereby small police stations in rural constituencies such as his and mine face the prospect of being closed to meet some of the cost pressures?
My hon. Friend makes a very good point. The constabulary has significant cost pressures and is one of the more poorly funded police forces. If it is to do what I have suggested—keep council tax under control and not put a huge burden on local residents—it will have to look across its whole range of spending and make some economies. We do not want front-line police officers removed, but that limits the constabulary’s options, so it may have to look at rural police stations. I very much hope that it does not, and we hope that it is not forced to do so, but there is a real risk. The police authority must play its part in keeping council tax under control. It will be tough, but Gloucestershire residents will expect their constabulary and police authority to look for as many savings as they can without hitting front-line police officers and the front-line policing that we all want.
The county council works in partnership with the local police force. The council will deliver a record low council tax rise this year of just 2.9 per cent., and I hope that the police can aim for that sort of number, although I recognise that the Government’s financial settlement is less generous to the police than it is to the county council.
One very helpful thing has happened. Since 2005, the Conservative administration running Gloucestershire county council has delivered on its commitment to fund 63 new police officers throughout the county—broadly one for every county council division. The final officers will be in place by this May, and the measure has made a real difference by putting in place officers who are used for community policing—getting police out on the beat. They are named officers who are known to their local communities, and the policy has been a significant step forward.
One thing worth remembering, however, is that, because of the extra funding from the local tax payer, the Government like to claim that there are now more police on the street, but in Gloucestershire all of that increase has effectively been funded by the local council tax payer. If it was not for the increase in the council tax precept, we would have fewer police in Gloucestershire today than we had 11 years ago. Further, should the floor to the formula grant be removed, Gloucestershire will lose funding that is equivalent—the chief constable has calculated—to 62 constables, which is almost exactly same number that the county council has funded from the council tax over the past four years. That would be a retrograde step, and particularly damaging for policing in rural parts of the county, where we really appreciate those officers.
I am sure that the hon. Gentleman is not arguing for uniformity of funding per capita throughout the country, because we in Gloucestershire hope that we never need the same police funding as somewhere such as inner-city Manchester; but will he confirm that the scenario that he rightly describes is a developing one, whereby we in Gloucestershire may face either cuts in police resources, or significantly increased council tax bills, or possibly both, and that it will not only hit the rural areas that he has described, but hit hardest some of the least well-off urban neighbourhoods?
The hon. Gentleman is quite right. I would not suggest that every part of the country should get exactly the same amount of money; my contention is that the disparity between areas is simply too large, particularly when the Government place central burdens on all police authorities. Incidentally, Her Majesty’s inspectorate of constabulary and the Home Office judge police forces on the burdens that they place on them; they do not take into account the relative amount of funding that they provide to them. Given that, police authorities should not get exactly the same, because we have to take into account need, but the funding formula does not accurately reflect the needs of different areas, and it is one of the questions that I should like the Minister to address.
On collaborations and mergers, the current state of finances for the constabulary means that it will look to find savings. It is also working with other forces, where that makes sense: for example, it runs the regional intelligence unit based at Clevedon, although a number of forces pay for it. The constabulary works very well, such as in procurement, and on uniform purchasing it is best in class, with low-cost and high-quality uniforms. The best example of collaboration is with other emergency services. There is a tri-service control centre, with control rooms for the police, fire and ambulance services, and it worked incredibly well during the flooding crisis in 2007. It represents a great opportunity for services to work together, but inexplicably, the Government insist on breaking it up by taking away the fire control element as part of an over-budget, behind-timetable and ill-conceived regional project. But enough of that; fortunately for the Minister, it is not his responsibility.
There is some concern that the financial squeeze on constabularies is part of an attempt to force through the back door those police mergers that failed to get through the front door. I challenged the Home Secretary on that issue, and she told me in the House that it was not the Government’s intention to force through mergers, so I should like the Minister today explicitly to rule out any police mergers—either by the front door or the back door—that are forced by a financial squeeze.
In conclusion, this year will be very tough for local policing in Gloucestershire. The Government grant is inadequate when compared with centrally imposed costs, and council tax payers are already stretched and cannot afford to have a large increase in the council tax precept. Gloucestershire county council has delivered a record low council tax rise, and I hope that the police authority will keep its increase low as well; but it would be very welcome if the Minister addressed my questions, so that the people of Gloucestershire might understand why their constabulary is poorly funded and whether the Government intend to do anything to put it right.
I congratulate the hon. Member for Forest of Dean (Mr. Harper) on securing the debate, and I am grateful for his best wishes to my hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing, who had originally intended to respond to him. If my remarks do not address all the hon. Gentleman’s points, my hon. Friend has agreed to meet him at a future date. That is on the record.
This is a timely opportunity to discuss funding, both nationally and for Gloucestershire, shortly before we finalise the funding settlement for 2009-10. I hope that the hon. Gentleman and others will join me in paying tribute to the police authority, to the chief constable of Gloucestershire, Dr. Tim Brain, and to his force for all their efforts and the very real improvements that they have made to the safety of the people of Gloucestershire. I am sure the hon. Gentleman knows that there was a 19 per cent. fall in recorded crime between 2002-03 and 2007-08 in the Forest of Dean, with a 6 per cent. fall between 2006-07 and 2007-08.
I shall say something about the funding picture generally, before turning to the specifics of Gloucestershire. My hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing made a written ministerial statement on 26 November 2008, confirming that we intend to implement the funding settlement for 2009-10 broadly unchanged from that which was announced in December 2007. We announced provisional funding totals for three years, incorporating the period from 2008-09 to 2010-11, and police forces and police authorities very much welcome the extra certainty that three-year settlements bring, not least because they will help to improve their medium-term financial planning.
In response to some of the hon. Gentleman’s points, police forces and police authorities in general have welcomed the reduction in the number of targets from central Government and, indeed, the reduction in the ring-fencing of resources. We very much want decisions and resources to be determined locally by police forces and police authorities. Next year’s funding settlement is built on a significant increase in resources for the police since 1997-98, and on a like-for-like basis, Government grant for the police will have increased by 60 per cent., or by more than £3.7 billion, during the period since then.
All police authorities and forces will receive a minimum 2.5 per cent. increase in general formula grant, which makes up the great bulk of central Government support to the police. Those with greater relative need will receive a little more, and if we add specific grants, the overall increase in Government revenue support for policing in 2009-10 will be 2.8 per cent. That is a fair and affordable settlement for all police authorities, backed up by a programme of reform and modernisation and a continuing drive to cut bureaucracy. Chief constables and police authorities have maximum flexibility to make the best possible use of resources.
The hon. Gentleman referred to concern about rising costs over the coming year. In the current economic climate, pressure will intensify on businesses to keep price increases to a minimum. Combined with expected reductions in oil and commodity prices, inflationary pressures are not the main issue facing the UK economy or police authorities.
We have just completed the usual period of consultation on our funding proposals for next year. Consultation closed on 7 January. Gloucestershire police and police authority have chosen not to make representations about the funding settlement. We are currently considering the representations we have received before taking final decisions on the grant settlement for 2009-10. Hon. Members will have the usual opportunity to debate the final police grant settlement in the House in early February.
Gloucestershire, like every other police force, has benefited from the solid funding settlements of the past few years. Assuming that, following the consultation process, the House approves the provisional allocations previously announced, next year Gloucestershire will receive £59.3 million in general grants—an increase of 2.5 per cent. or £1.5 million—and an estimated £9.7 million in specific grants.
As the hon. Gentleman knows, we have said that it is our intention to move to full implementation of the funding formula at the fastest pace that is compatible with ensuring the stability of police forces. Many forces that contribute to the funding floor are now pushing for greater or full implementation of the needs-based funding formula. Not unnaturally, police authorities such as Gloucestershire and my own in Northumbria that are supported by the funding floor want the protection to remain in place. We recognise that the funding floor is important. Gloucestershire has benefited for many years from a funding floor. This year, it receives £2.5 million more than its strict formula share and next year it will receive £2.4 million more.
The damping mechanism operates to ensure that no police authority suffers a substantial change in funding from one year to the next. It is in no one’s interest that one part of the country should suffer a sudden decrease in funding. That would be a recipe for instability. A fine line must be steered to ensure that we have both a stable finance system and that resources are targeted where there is greater relative need. For next year, the 2.5 per cent. grant floor will provide for stability and a degree of scaling above the floor, thus enabling us to target resources on areas with greater relative needs and implement the formula more fully. The hon. Gentleman is correct in saying that we intend to move towards an improved funding mechanism, but let me try to reassure him not only that we are aware of the concerns that he and his chief constable have raised, but that, in moving forward, we want to address those concerns wherever we can.
The Minister is quite right. His own police authority would be one of the biggest losers from a removal of the floor, so from his point of view it is to be hoped that the Government will not be doing that very quickly. He has just acknowledged that the current formula is not perfect. He said that the Home Office wants to move to a new formula and that it does not accept that the current formula accurately meets relative needs. Does it therefore make any sense to push to remove the floors and ceilings, as that would inevitably have a detrimental impact on a large number of police forces? Would not it be more sensible to keep that system, get the new formula in place, which people could accept genuinely reflected relative need, and then move to the new formula?
The hon. Gentleman will know that, once a formula is put in place, over time, as circumstances change, the appropriateness of that formula will also change. From time to time, therefore, in this and other areas, it is the Government’s responsibility to look at the funding formula. By announcing a three-year settlement, which will run until 2010-11, and by consulting on the new funding formula—two meetings have already taken place—we are trying to ensure that the new formula is in place by the time that the next round of finances is announced in 2011. If the hon. Gentleman is asking whether there would be sufficient change with the application of that formula to warrant a mechanism for guaranteeing the fairness that we have tried to ensure in the current funding formula, I am sure that that will form part of the discussion. In moving from one funding formula to the next, we anticipate not only that the formula will be improved, but that it will have built into it a mechanism to ensure fairness.
The hon. Gentleman raised a number of specific points about royal protection and about funding for police community support officers. Let me encourage him by saying that discussions are already under way on what would be the best funding formula for 2011-12 onwards, and I encourage him to take part. The chief constable is already involved, and I urge Gloucestershire police authority and people from other force areas to take part in those discussions. It is in all our interests that we get the very best formula, not just for Gloucestershire, but for the rest of the country, too.
The other important element of police funding, as the hon. Gentleman said, is the contribution made directly by local council tax payers through the police precept. The Government expect the average increase in council tax in England to be substantially below 5 per cent. in 2009-10. We have made it clear for a long time that we will not tolerate excessive increases in council tax. In this difficult economic climate, we will not hesitate to take strong action if necessary to protect council tax payers from excessive increases, including requiring authorities to re-bill if necessary.
Final capping principles will be set out after authorities have set their final budgets, but my right hon. Friend the Minister for Local Government wrote to all local authority leaders on 9 December to say that the Government are prepared to announce the principles in advance if the circumstances suggest that capping may be necessary.
Returning to the position in Gloucestershire, it is only right that local decisions are made locally by the chief constable, who is best placed to decide how to deploy resources. Gloucestershire is a relatively well resourced force, with 1,338 police officers in March 2008—205 more than in March 1997. That is an increase of 15 per cent., which exceeds the overall 11 per cent. increase for England and Wales. The police are also supported by 162 police community support officers and 684 police staff.
The Minister is quite right that Gloucestershire has more police officers, but as I made clear in my remarks, that increase has largely been funded from council tax. Before I was elected to the House, there was a 51 per cent. increase in the police precept in a single year. That was a significant contribution to funding the increase in police officers. If it was up to the national grant alone, there would be fewer police officers in Gloucestershire now than there were 11 years ago.
If it was only up to the national grant and we did not have the systems in place through the damping mechanism that the hon. Gentleman talked about, there might be fewer officers, but I would hate anyone to go away with the impression that the resourcing of Gloucestershire police and police numbers are entirely the responsibility of locally raised funding. The Government continue to put a considerable amount of money into policing, which accounts for the record number of police officers that we have had in the past few years.
The hon. Member for Cotswold (Mr. Clifton-Brown) referred to a police station, and I remind him that the staffing and closure of police stations are operational matters for the chief constable.
We should not focus on officer numbers alone, but on making the best use of officer time. Gloucestershire is doing that. The 57 per cent. increase in police staff since 1997 has allowed the chief constable to improve service quality and to free police officers for front-line duties.
In conclusion, I reiterate the commitment made by my hon. Friend the Minister for Security, Counter-Terrorism, Crime and Policing to meet the hon. Member for Forest of Dean should issues remain for discussion, but I thank him for securing this debate and allowing me to set out the national position and that affecting Gloucestershire. There will be tough decisions ahead, but with the substantial support that the Government have made available, authorities such as Gloucestershire have laid firm foundations and given the police the platform from which to continue the improvements in the service that they provide to our constituents, and I am confident that they will continue do so.
I am delighted to have this opportunity to introduce a debate on a big and important subject. I have two reasons for doing so. The first is local: like many other MPs, I am hearing from a growing number of constituents who are running into mortgage distress or who have faced or are facing repossession, and I wish to speak up for them. But I believe that every MP could say that; there are no special circumstances in my constituency.
The main reason for this debate is to try to pursue a series of questions about the Government’s recent initiatives on repossessions, which I welcomed. Obviously, we will debate these matters on the Floor of the House amid the normal party political banter, but on this occasion I want to take advantage of the short Adjournment debate format to pursue what are, in essence, factual questions about where we are and where Government policy stands.
My starting point is that the Council of Mortgage Lenders has estimated that there will probably be some 75,000 repossessions in 2009, which is roughly the same figure as occurred at the peak of the last recession in 1991. Of course, they are the tip of the iceberg. In the last recession, there were estimated to be some 350,000 cases of arrears of varying degrees of severity, and the current projections are that half a million mortgages may be in arrears of some kind at the end of this year. Could the Minister begin by saying whether he regards the CML’s assumptions as sensible and realistic? Are they the assumptions that the Government themselves use?
I ask that question with a particular point in mind. Three months ago, the CML was using the same figure—75,000. It is still using it despite the introduction of what seemed to be quite promising Government initiatives. Does that mean that the CML’s assumptions are not up to date, or does it mean that the situation is deteriorating? It would be helpful from the outset to get a sense from the Minister of the Government’s working assumptions about the scale of the problem and how it will evolve during the coming year. As to why that is a problem, I hardly need to state the obvious. Repossession is a tragedy for families because it usually involves not just the loss of a job but the loss of a home at the same time. It is a double tragedy.
However, there are some less obvious reasons why repossession is a problem. It is a problem for society, particularly for local government, because of the pressure that it brings to bear on social housing. Over the past few weeks, there has been an upward revision in the number of people on waiting lists from 1.7 million to 2 million, so the pressure is clearly there.
In addition, repossession frequently results in distress selling, thereby driving down the price of housing at a particularly sensitive time and creating additional negative equity problems. Clearly, it is desirable from a wider market standpoint to avert it.
Of course, there are many hidden costs. For example, before this debate I was sent a report on the incidence of mental health problems among people facing repossession. There is a great deal of general anxiety. A YouGov survey suggests that 44 per cent. of all mortgage borrowers are currently anxious.
I would like to proceed by asking the Minister about each of the four components of the Government’s response. There has been a flurry of positive initiatives: the pre-action protocol; the reforms to income support for mortgage interest—ISMI—which involves interest payments under the social security system; the mortgage support scheme in collaboration with the banks; and the mortgage rescue scheme. I shall deal with each of them briefly.
The pre-action protocol, which my colleagues and I had been calling for for some time, was particularly important. It was an intervention in court rules by the Ministry of Justice to try to ensure that repossession is always treated as a last resort, that all other options are explored, and that financial advice is available. As I understand it, the Government’s guidance to the courts should have that effect.
A case that I recently encountered is the kind of case that the protocol should reduce or eliminate. The home of one of my constituents has just been repossessed by a company called Capstone Securities, a subsidiary of Lehman Brothers. My constituent had tried very hard to save his home. He had put an offer to the bank that he would repay 80 per cent. of his arrears on the spot and clear the remainder within two months, but the bank rejected it. It wanted to repossess, end of story, no negotiation. Many people have found themselves dealing with uncompromising, unreasonable creditors who operate in that spirit. My constituent has now lost his home, and because of the delay in selling, has seen all his equity disappear. There are thousands of stories of that kind.
The questions that are now being asked about the Government’s initiative, welcome as it was, are about its limitations, both legal and practical. Can the Minister tell us what kind of assessment the Government are making of how the new system of rules is working? One point that is made is that because the rules are guidance and not binding on judges, the judges quite understandably apply legal principles. They view a mortgage as a contract and therefore do not treat mortgage arrears as they would treat arrears on a tenancy. There is not a test of reasonable behaviour, and therefore mortgage lenders are able to repossess much more easily than a landlord is able to obtain repossession from a tenant.
Another point is that mortgage lenders, particularly those outside the mainstream banking system, are often highly unreasonable. There are cases of legal costs being added to the bill without the need for any reference to the court, and of companies not being obliged to return to the original owner any equity in the property. There is a general unreasonableness in the way that court settlements emerge, and the guidance that the Government have established does not appear to deal with the problem.
An additional difficulty has now surfaced: a legal precedent was set with GMAC just before the Christmas period in which the mortgage lender established that it could repossess without even going to court. Can the Minister give the Government’s assessment as to whether that case is a serious problem or merely an anomaly?
Finally in this category, there are the problems in respect of repossession of buy-to-let property, and the vulnerable position of tenants who find themselves trespassing in their own home and being required to move out quickly, often within hours. I believe that the Government’s new guidance suggests a stay of execution of up to seven weeks, but I would be interested to have confirmation that it is now being followed and is working.
The second area of change is to the ISMI regulations, which cover interest payments through the social security system. The delay once someone is out of work is now 13 weeks rather than 39 weeks, and the scheme is extended to properties of £200,000 rather than £100,000. Clearly, the scope of the scheme has been enlarged. It would be interesting to know how many families the Government estimate will be helped by the enlarged ISMI scheme.
Would the Minister acknowledge that there is a problem in the scheme in respect of households in which two partners are working, which is often the case? An example was given to me of a family in which one partner with a salary of £24,000 loses their job. Their partner earns £7,000 a year in a part-time job, but because they are working more than 24 hours a week they are not eligible under the ISMI scheme at all. Despite a substantial drop in income, they cannot be assisted.
The third area of support, which I shall spend a little more time on, is a mortgage lender-led initiative—the mortgage support scheme. It is an imaginatively constructive idea in which the mortgage lender absorbs interest arrears over a couple of months, and the Government, in effect, underwrite the arrears while they are in the process of being corrected. The feedback that I am getting, particularly from voluntary organisations, is that the scheme is now being very tightly drawn to exclude large numbers of people who might otherwise be eligible for it. One of the conditions, as I understand it, is that it would not include people in negative equity. Of course, in the current environment, that excludes enormous numbers of people, because the market is falling rapidly and those who need help most are effectively excluded from this scheme.
I am also told that one of the difficulties that the banks themselves are advancing is that, by participating in this scheme, they have compromised their position under the financial regulations, because they are required to hold more capital if they have clients who are in arrears. The figures quoted to me show that the equivalent of between 30 and 80 new mortgages might be sacrificed for every case of a family helped under this arrangement. If that happens, it is completely mad and totally undermines the purpose of the arrangement. Is the Minister’s Department discussing with the Treasury and the Financial Services Authority whether these bizarre regulations, which effectively undermine the good work that this scheme is doing, can be modified?
What is the Government’s own estimate of the number of people—the number of families—who will be helped by this scheme? I believe that, on the day it was introduced, the Secretary of State made an estimate of approximately 9,000 people. I have not heard that number confirmed since. It would be useful to have an indication of the magnitudes we are talking about.
The fourth and final intervention is the mortgage rescue scheme, under which people who fall into serious arrears can become tenants in their own homes, which has the valuable objective of ensuring that, even though they cannot cope with the mortgage, they are not forced out on to the streets. I believe that there is a £200 million package designed to make this happen. The feedback that I get is that this is now beginning to work, with the collaboration of housing associations and local councils. Clearly, because this scheme is decentralised, which is potentially a positive feature, it will necessarily be applied unevenly. Do the Government have any mechanism that would tell us where this programme is and is not being applied, whether they are bringing any pressure to bear on councils to introduce it and how they are monitoring its effectiveness? I understand that, for understandable reasons, local councils and housing associations are only willing to take people on if they have limited problems, which, again, excludes people with negative equity difficulties. It would be useful if the Minister provided feedback about what numbers we are talking about. Is the number that has been quoted—about 6,000 in the coming year—correct?
The answer to the problem of keeping people in their own homes, even though they are in serious arrears and cannot sustain a mortgage, is, in the private sector, sale and leaseback, the market for which is flourishing. There were some serious abuses in that market and the Government undertook an investigation, through the Office of Fair Trading, that reported in autumn last year. There is a recognition that that market needs to be regulated. When and in what form will that regulation take effect?
My concluding comments are these. We have had a series of initiatives that are valuable in themselves. However, the feedback that I get from the people who are potential beneficiaries, from the voluntary organisations that represent them and from the industry is that although they are valuable they are very limited. If we add 9,000 and 6,000, which are the estimates so far in respect of the two main Government schemes, we are talking about 15,000 people, potentially, out of 75,000 people, which is an important figure but is still less than a quarter of those involved. That leads to the necessary conclusion that, even with these schemes in place, large numbers of people will have their homes repossessed this year. That raises the question of where they will live.
We are in an environment where the provision of social housing is now deteriorating. Industry estimates show that the total number of units built for social housing in the year to the end of March is likely to be some 85,000, as opposed to 185,000 in the previous year. So we have a shortfall of 100,000, much of which is caused by failures of joint projects with developers. Repossession is taking place in an environment where the provision of social housing is deteriorating. How far do the Government’s proposals match the severity and scale of the repossession crisis that we now face?
I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this important debate. I was struck, on listening to his excellent contribution, by how measured it was. As he said, we can, to some extent, keep party political banter out of this Chamber with regard to such a serious issue. I pay tribute to him for the manner and the measured way in which he addressed his points and asked his questions, as is always the case when he contributes to debates in the House.
In difficult times, the Government are committed to doing everything that they possibly can to provide support in the short term for borrowers facing difficulties and in promoting the long-term stability of the market. What the hon. Gentleman said about repossessions is true. It is a major trauma that is, arguably, the biggest single difficulty that a person can face in their life. It affects people’s relationships, their health—particularly their mental health—their well-being and quality of life. Children can be uprooted from their school and adults from neighbours, friends and family. In the current challenging economic climate, more people are understandably worrying that they could lose their home. The key point is that just as fear of crime is an important consideration that policies need to deal with, repossession and the fear of repossession need to be dealt with, too, so that people who may face economic difficulties and are not, at the moment, facing repossession can be reassured that the Government are providing real practical help and doing everything that they possibly can to ensure that a particular household can keep its home and that it will not be repossessed.
The current figures provided by the Council of Mortgage Lenders show that there have been some 30,200 repossessions in quarters 1 to 3 of 2008, which represents about 0.26 per cent. of all loans. We accept that repossessions are rising, but we must also remember that the numbers affected at present remain small in comparison with the early 1990s, despite the fact that more than a million more householders now own their own home.
I do not want to tell the House that I am complacent and I do not want to provide a lazy approach to this issue. The Government are working night and day to ensure that repossessions are minimised as much as possible. I want to reassure the House, and families throughout the country, that we are determined to help as much as possible. No household that experiences a temporary drop in income through no fault of its own, and which is willing to pay back what it can, should fear repossession.
There is also an onus on householders, who should be required not to put their head in the sand. Instead, they need to talk to the lender if they are facing financial difficulties. In the week when people were returning from the Christmas and new year break, before the House was sitting again, I toured my constituency and visited the citizens advice bureau. In mentioning citizens advice bureaux, I pay tribute to the hon. Gentleman, who is the CAB parliamentarian of the year. It can be important for people to talk to their local citizens advice bureau, which provides real practical help.
As a Government we have taken important steps, as the hon. Gentleman graciously mentioned. We have introduced new schemes and expanded others. We have offered practical help to as many people as possible. The courts have agreed to the mortgage pre-action protocol, a legal agreement which sets out that lenders will only use repossession as a last resort and will look at all the other alternatives with the borrower, whether that involves reducing monthly payments or deferring for a time. Hopefully, that would address the point that the hon. Gentleman made about his constituent, which sounded tragic. Hopefully, that would not happen today. The mortgage pre-action protocol would mean that nobody’s home would be repossessed within three months of the first missed payment.
The hon. Gentleman asked how this scheme is working. I have to say that it is early days. We are working closely with the Ministry of Justice to ensure that we can iron out any potential difficulties. I would welcome the hon. Gentleman’s mentioning relevant cases that he comes across in his work as a parliamentarian, and in his constituency, so that we can find out whether we can tweak out any of the difficulties to ensure that people get practical help.
To help to ensure that households can be given advice, more funding has been made available for national debtline and Citizens Advice to help consumers with money problems. That includes almost £6 million of additional investment to March 2011 in telephone advice and £10 million to March 2011 to expand face-to-face debt advice capacity.
In the pre-Budget report, we announced reforms to the support for mortgage interest scheme. That benefit is available to those receiving jobseeker’s allowance and other income support-based benefits to help people keep up their mortgage payments if they lose their jobs. We have raised the outstanding mortgage threshold so that households are entitled to receive it if they have less than £200,000 remaining on their mortgage, and we have reduced—this is a key point—the waiting time so that people can receive it 13 weeks after they lose their jobs, rather than 39 weeks.
Last week, I was at a meeting of a branch of the trade union Unite in my constituency. It consisted predominantly of subcontractors. As you will appreciate, Mr. Cummings, that is a volatile industry in which there are periods of unemployment. Those people mentioned that they are delighted with the scheme because in periods of economic volatility and uncertainty about jobs, it can provide practical help.
For vulnerable households that would be otherwise eligible for homelessness assistance if their homes were repossessed, such as families with children, the elderly or the disabled, we have set up the mortgage rescue scheme. Those at risk of repossession because of other loans secured against their homes are also now able to apply.
If the home owner can keep up some mortgage repayments, the local authority or housing association will buy a share in the home so that the monthly mortgage repayments are cut. If home ownership is no longer a realistic prospect, the local authority or housing association will buy the home outright and the family will be able to stay there as a tenant. Largely thanks to the proactive work of my right hon. Friend the Minister for Housing, we have brought forward the introduction and implementation of that scheme. The first 80 authorities began fast-tracking their mortgage rescue schemes in December, and we shall announce imminently what is happening with other authorities.
We are in the process of establishing a new scheme to help people who are having trouble making payments but are not eligible for ISMI—income support for mortgage interest. We have in mind families in which perhaps one person within a couple has lost their job or income or experienced a dramatic cut in overtime or payments. Applicants must have an outstanding mortgage of less than £400,000 and savings of less than £16,000. We estimate that this will take care of 98 per cent. of all mortgages. People have to prove that they have suffered a serious drop in income, demonstrate that they have kept up some repayments for at least five months and commit to paying at least 25 per cent. of their existing monthly payments. The rest of their payment will be deferred and added on to the end of the term, guaranteed by the Government and the bank. After a year, the bank will look again at the circumstances and, if necessary, extend the deal for another year. The idea is to make monthly payments more affordable, giving people practical help and valuable breathing space to get back on their feet.
The scheme is voluntary, but already the country’s eight largest lenders, representing 70 per cent. of lending, have agreed to support the new scheme and pledged to work with the Government to develop it. Since the day of the Queen’s Speech, when my right hon. Friend the Prime Minister announced it, we have been working with about 15 of the major lenders to get the scheme off the ground. We hope that the remaining lenders will also participate.
We expect the scheme to help significant numbers of households to avoid repossession over the next two years. The hon. Gentleman mentioned a possible target of 9,000 households being helped. The Minister for Housing has been absolutely clear about the fact that we are not setting a target or a cap on the numbers that might participate. It will be a demand-led scheme. People can feel reassured in coming forward that they have not missed a cut-off point. It is not the intention at all for household 9,001 not to be provided with help; the intention is to provide practical help to all households that need it.
My right hon. Friend the Chancellor of the Exchequer has announced a lending panel to bring together the Government, regulators, lenders, trade bodies and consumer groups. The panel will monitor lending to both households and businesses, encourage best practice throughout the mortgage market and ensure that lenders are aware of all the alternatives to repossession.
We are working to address a number of concerns affecting specific groups. The hon. Gentleman alluded to that. The Office of Fair Trading is developing guidance to help those who have taken out extra loans against their homes. The practice is known as second charge lending. The guidance will stress the importance of treating borrowers sympathetically and doing everything possible to avoid repossessions. New industry best practice guidelines, published in December, clearly set out how people can expect to be treated by their lender if they are experiencing difficulties.
The hon. Gentleman referred to the sale to rent back market and the OFT’s market study in that regard. It recommends that that market is brought within the scope of FSA regulation, and we shall be consulting on that shortly.
The hon. Gentleman touched on a very important matter. The fear of repossession and repossession itself do not hit just home owners. They also hit tenants; they, too, are potentially vulnerable. We need to act to help tenants who are not in arrears and who are working hard and paying their rent, but who face the prospect of their home being repossessed, through no fault of their own, if their landlord has secured a loan on the property. At present, evidence suggests that buy-to-let landlords are no more likely to be affected by repossession than other households. However, I am concerned about the issue and I recognise that tenants in the private rented sector would face eviction in the circumstances described, which seems unfair.
To protect those tenants, we shall ask the Civil Procedure Rule Committee to amend the rules so that buy-to-let tenants get up to seven weeks’ notice if their landlord’s mortgage defaults. At the moment, as the hon. Gentleman said, they have notice of as little as two weeks or even a matter of hours, which is not fair. We encourage all landlords and lenders to communicate with tenants so that they are given time to make alternative arrangements if their home is at risk. We also want to ensure that tenants who are at risk speak up, get independent advice and attend the court hearing so that their needs are taken into account.
I return to where I started by saying that in these unprecedentedly difficult times, in which we are facing global financial pressures the likes of which we have not seen for many decades, the first priority of the Government is to reassure people. We need to ensure that wherever possible, families do not have to suffer the trauma and upheaval of repossession. People also need to be reassured that they do not need to fear repossession. All households at risk can benefit from the new emphasis on repossession as a course of last resort, and from the enhanced debt advice services. As I have made clear, we are also putting in place a variety of schemes, offering tailored and specific support depending on the individual circumstances.
In a debate in this Chamber earlier today, I said that the watchword was “flexibility”. We need to work across Government, whether that involves the Treasury, the Department for Work and Pensions, the Ministry of Justice or my Department, to ensure that we have a seamless product that can provide practical help to families in order to minimise repossessions as much as possible. We need to be flexible. We need to learn the lessons from what happens on the ground, which the hon. Gentleman and others will bring forward, so that we can tweak out some of the teething troubles that we might see with these innovative schemes.
In these difficult times, we are determined to provide real help to households that are frightened. We need to reduce that fear as much as possible and we have put in place schemes to help to do that. The Government are ambitious to do more and I am sure that, working together in a cross-party consensus—that was the manner in which the hon. Gentleman made his excellent speech today—we can do more.
Question put and agreed to.