I am delighted to have secured this debate on behalf of all hon. Members who share my concern about the cancellation of the housing market renewal initiative, and the terrible impact that that will have on those affected by it. I shall give an overview of the problems faced by all pathfinder areas and highlight how the cancellation of HMRI will affect some areas of Liverpool.
The Government’s plans for house building over the course of this Parliament can at best be described as conservative. Between 2005 and 2010, Labour delivered 256,000 affordable homes in England, including 142,000 additional homes for social rent. Over the five years of this Parliament, however, the Government are planning to deliver only 150,000 affordable homes—100,000 fewer than Labour achieved in the previous Parliament. HMRI was originally envisaged as a 10 to 15-year programme, but it was abruptly ended eight years in, when many of the schemes were reaching fruition.
In March, an Audit Commission report estimated that the HMRI had generated about £5.8 billion of economic activity across the UK, which created 19,000 jobs in the construction and related industries, and sustained more than 2,600 jobs in the construction industry each year. Thousands of homes have been built and more than 108,000 have been refurbished.
At the neighbourhood level, HMRI has helped to stabilise market conditions and provided a strong sign of change. Private sector resources have been leveraged in to the projects, and more than 15,000 new homes have been built in areas where no properties had been built for a long time.
In Merseyside the pathfinder scheme known as NewHeartlands delivered 2,297 new builds, refurbished 18,263 homes and made 65% of its planned acquisitions. Shelter, the housing and homelessness charity, said:
“The Housing Market Renewal pathfinders have brought much needed investment to parts of the North and Midlands experiencing low demand for housing and long term economic decline.”
The decision to cut £120 million of funding and to end HMRI has been tough on Liverpool. There are thousands of people on the housing waiting list across the city. Many families live in overcrowded or unsuitable homes. The decision puts an end to the good work being done to alleviate these problems and makes future work difficult, and it is clear from the mixed messages coming from the Minister for Housing and Local Government—I am sorry that he is not here today—that there is no clear exit strategy.
Rather than putting in place a phased withdrawal that would allow local authorities to manage the axing of funds, the Government have stopped the scheme dead, which has created confusion, uncertainty and bitter disappointment. The lack of strategy is evident, given the situation that the Government have left behind.
I congratulate my hon. Friend on securing this most important debate. Will she join me in raising the fact that other areas must have suffered, including areas such as Stoke-on-Trent? The Renew North Staffordshire pathfinder scheme cleared many properties in that area and demolished great swathes of the city, often taking a long time to piece together the ownership of the various lots of land. It was ready to start the next phase when, all of a sudden, it found itself with derelict land and nothing to build.
We have had similar experiences in Liverpool. It is devastating for the cities and towns concerned, as there are literally acres of flattened land with nothing on them. Near Smithdown road in Picton, there is nothing but green-grey grass, but people know that houses once stood there.
In Kensington and Picton, which are two wards in my constituency, some dilapidated housing stock sits mostly empty and boarded up. Some people live in what have become ghost towns. Eight out of nine houses are unoccupied. The people still living in those areas feel desperate and let down. They put up with living in decaying conditions because they were promised that they would be rehoused. People across Liverpool knew that if they lived in an area in a certain phase—one of phases 1 to 8—at some point they would be moved out their housing and the area would be regenerated. They now face the disappointment of having to stay.
If progress is not made on demolition, the shell of these properties will rapidly deteriorate, and that will increase the risk of collapse, which could endanger residents. Worse still, the land next to the residents lies idle. As I said, new homes were meant to be built there, but that will not happen because the funding has been withdrawn. The majority of people remaining in the clearance areas are vulnerable, elderly or have health problems. Residents would like to stay in the local area, but they do not have that choice because there are no new or alternative houses.
This is happening not only in Liverpool, as I am sure we will hear from other hon. Members, because it is a familiar story in the other pathfinder areas. The Audit Commission report into HMRI states:
“At this stage there are too many isolated and vulnerable residents still living in poor housing”.
Mike Gahagan, the former chair of the Transform South Yorkshire pathfinder, has said that
“the sudden termination in HMR funding has left many families in distressed surroundings”.
Stuart Whyte, the former chair of Gateway Hull and East Riding of Yorkshire pathfinder highlighted the fact that the areas have increasingly become a magnet for crime and antisocial behaviour.
These residents are already vulnerable and living in these areas for an extended period is likely to have a major impact on their health and well-being. Empty homes attract the theft of valuable metals and lead. The other weekend, I visited Ben Kwonko, a constituent who lives in an area where eight out of nine homes are tinned-up and unoccupied. His home is damp and lead has been stolen from his roof numerous times. He and his family are desperate to move out of that property, but he has no choice. There is also an increased likelihood of arson attacks in these areas.
The Minister might have realised the damage that ending HMRI has done to these areas, as he announced in May that a £30 million transition fund would be made available to the five most deprived HMRI areas— Merseyside, east Lancashire, north Staffordshire, Hull and Teesside. I welcome that announcement as a first step. Liverpool has been comparatively lucky by being able to access some of that money, but the reality is that such figures are a drop in the ocean when compared with the scale of the challenge. The money will not deal with all the outstanding housing renewal problems in some the neighbourhoods in Liverpool.
I refer to an example in Anfield, which is in the constituency of my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), who I am sure will reinforce the point. In his constituency, areas in phases 6 and 7 do not meet the transition fund criteria for occupancy, and there is a requirement that the fund should not open up new phases of redevelopment. However, people are stuck in those areas. The funding decision also leaves four pathfinder areas with no extra funding and no clear idea of why that is.
Will the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), share with us how the figure of £30 million was arrived at? How was the decision reached over which pathfinder areas are to receive money from the transition fund? What were the criteria and who set them? What support, if any, does he plan for those pathfinder areas not eligible for the transition fund? The transition fund does not address the fact that a large amount has already been spent on pathfinder schemes—thus far for nothing. We have seen £2.2 billion of taxpayers’ money invested in housing market renewal since 2002. What assurances can the Under-Secretary give that these areas will not regress, and that money already spent will not be wasted?
It is not only taxpayers’ money that is in danger of being wasted. Ros Groves is chair of the Anfield and Breckfield housing and physical regeneration group in Liverpool. The Minister for Housing and Local Government—I keep referring to him because I was expecting him to answer the debate—was in Liverpool when he announced the transition fund in May. Ros Groves said that he
“went on about how we need to get private sector involvement and I said: ‘We’ve got that. We’ve had £207 million spent here by businesses. What do you do with that? Just throw it in the bin?’ And he didn't have an answer because there is no answer.”
I hope that the Under-Secretary will be able to answer that today.
As well as a clear lack of a strategy on how to deal with residents living in pathfinder areas, there has been complete confusion over what funds will be available to finish the planned development in these areas. In October 2010, the Housing Minister said:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work.”—[Official Report, 21 October 2010; Vol. 516, c. 1114.]
That gave hope to pathfinder areas that they would be able to maintain funding for these projects—albeit on a reduced scale, but still at a reasonable level. However, the Minister’s commitment was left in tatters just over two weeks ago when Lord Heseltine, the chair of the independent advisory panel for the regional growth fund, told the Communities and Local Government Committee:
“The regional growth fund is not in any way a replacement for the housing market renewal funding...There is no way in which we are doing housing renewal.”
That is a complete rejection of what the Minister said to the House in October and of what he told my hon. Friend the Member for Liverpool, Walton and me in a meeting in Liverpool. He gave false hope to those in Liverpool and other pathfinder areas that a solution may be found.
We are left with a lot of unanswered questions, so I hope that the Under-Secretary will answer some of them today. What discussions has he or his colleague had with Lord Heseltine regarding using the regional growth fund to develop the HMRI pathfinder areas? When was the decision made not to allow regional growth fund money to be used for housing? Who made it and when did the Housing Minister find out? Did the Under-Secretary or the Housing Minister know in advance of Lord Heseltine’s Select Committee appearance that he was going to veto the use of regional growth fund money for housing market renewal? When the Housing Minister gave his commitment to the House in October, had an agreement been reached to provide funding from the regional growth fund, which has subsequently been breached, or was he hoping that the funding could be used, but had not yet received concrete assurances that it would?
In addition to explaining how the Government made the decisions that have got us into this mess, I hope that the Under-Secretary will finally give us some clarity and provide an indication of how we can move forward and complete the housing projects, which is ultimately what we all want to see. I believe that the Housing Minister is interested in finding a solution.
The transition fund that was announced was £30 million. If the projects had continued in Liverpool alone, £120 million more would have been needed over the next seven years. However, there are another eight pathfinder areas. We expected some scaling back, but there are areas in my constituency and others across the pathfinder areas in which people are living in dilapidated housing. Those people were supposed to be decanted in a few years’ time. Their properties were expected to be regenerated and rebuilt, thus bringing much needed jobs to local areas and improving people’s surroundings, as they all deserve.
On that point, let me just say that while £120 million might sound like a large amount—indeed it is a very large amount for just Liverpool alone—does my hon. Friend accept that if the cuts were not being made so deep or so fast, it would not be such an issue? Does she also accept that the economic benefit to not just Liverpool but the country would be huge and would far outweigh the investment required?
I thank my hon. Friend for his helpful intervention. Of course, if the cuts had not been so deep or fast, we could have had that money. As I said, it was another seven years before the HMRI was due to be completed. I do not have the figures in front of me, but I have seen some astounding numbers detailing the economic benefits and multiplier effects of having those houses built in all the areas. The knock-on effects would benefit the NHS, and people would find work and also live in better areas. As I said, there would be many more local construction jobs. On an annual basis, there would be nearly 3,000 sustainable jobs in the construction industry, and such jobs are much needed up and down the country. Although it is clear that the HMRI has ended, there is still a window of opportunity—albeit one that is rapidly closing—to build on the work done under the initiative and to utilise the expertise and partnerships that were built up during the course of the scheme.
In Merseyside, all the NewHeartlands authorities are trying to maintain momentum. Other sources of funding to finish regenerating these neighbourhoods are being thoroughly investigated. I have spent several hours meeting the housing market renewal teams at the council, and they are dedicated to doing everything they possibly can to leverage in that funding.
Liverpool is actively market testing refurbishment-based solutions for three of its neighbourhoods—Arnside road, Granby Four Streets and Webster Triangle. Initial indications are that there may be interest from partners to deliver in some of those areas. Meanwhile, in the renewal areas, new homes are being delivered by lead developers and are popular. I live on a former housing market renewal site. Examples of other such sites include the Parks in Anfield and the former Easby estate, both of which are in north Liverpool, where historically there has been little or no private sector house building.
Will the Under-Secretary commit to working with councils such as Liverpool and local communities to develop plans and identify funding for developing the pathfinder areas? So far, little support has been extended by the Government to make up for the complete cut in HMRI funding. The reality is that while councils are doing their best to find innovative solutions to this problem, their efforts are a drop in the ocean compared with the level of funding previously committed under HMRI, so they need more support from the Government.
As Elaine Stewart, the head of housing renewal services at Liverpool council, has said:
“We have to forge more relationships with the private sector although, in housing market failure areas, private sector rules don’t apply and we have to be realistic about the amount of private sector funding coming in. Without some public sector funding, it won’t work.”
At the final oral evidence session of the Communities and Local Government Committee inquiry into regeneration, the Minister for Housing and Local Government hinted that the Government may bring forward new funding. He said:
“This is not a policy launch, but I have an idea in mind where communities will be able to access further sums of money through a local process which will enable them to regenerate in ways that suit them locally.”
I would love to hear about those proposals. It is a shame that the Housing Minister is not here to tell us more about what he meant. However, until the Minister comes forward with something other than an idea—he did refer to it only as an idea—we will not be any closer to a solution.
On behalf of all my affected constituents and all those across Liverpool and the other pathfinder areas who live in intolerable conditions, I urge the Under-Secretary to go back to his Department and revisit the decision to end HMRI. Some £790 million has already been committed in Merseyside. We want a solution that will mean an end to thousands of people being forced to live in out-of-date, decaying and dangerous housing.
I thank you, Mr Gale, for your stewardship this morning. I hope that the Under-Secretary will address the issues that I have raised, and I am sure that my hon. Friends will raise other concerns during the rest of the debate.
It is a pleasure to serve under your chairmanship, Mr Gale. I am sure that you will give us all an opportunity to contribute to this important debate, which I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing. The point that I want to get across to the Minister, who has a strong belief in local government, is that the housing market renewal programme, of which north Staffordshire was one recipient, was an important means by which capital funding came to areas where there was economic failure. The whole programme was intended to restore the balance between the south-east and other places where there is no economic failure and areas such as ours, which, for well-documented reasons, need to deal with issues such as absentee landlords. There are whole blocks of homes the purpose for which has now gone.
It has been well documented that in the early stages of the housing market renewal programme many MPs had real concerns; indeed, many MPs in Stoke-on-Trent had concerns. My hon. Friend the Member for Stoke-on-Trent South (Robert Flello), Mark Fisher, the former MP for Stoke-on-Trent Central, and I challenged the officials who were introducing that programme in the city, because it did not seem to us that they were working with or alongside local communities, or that there was a master plan to consider the kind of bottom-up regeneration that we wanted for our communities. In the early days, the officials’ proposals were all about the large-scale demolition of a large number of houses, which had no place in our local regeneration strategies.
Through careful, long-term lobbying, we did our best to change that approach. Across Stoke-on-Trent, there was a sea change where the housing pathfinder programme took place. In some places, the change was too little, too late, but in other places there was a major change. The programme was late in getting off the ground in north Staffordshire—it was about three years late in getting together all the different proposals—so we were behind where we should have been. Once the programme got off the ground, however, it started to make an impact.
The problem that we now face is the sudden and unprecedented withdrawal of funding by the Government in the comprehensive spending review, with no clear detail being given about what will be put in its place. My hon. Friend the Member for Liverpool, Wavertree has outlined the concerns about the regional growth fund. There was an assumption that that fund would provide some of the capital investment that we needed, but that did not happen.
We are now left, once again, with the huge disparity between the parts of the UK where there is no economic failure whatsoever and those parts where there is economic failure and where we are trying to remedy that failure. What we desperately need is a cocktail of measures, whereby everything works alongside everything else to get economic investment, restructuring and strategic planning in line with what local communities want, which means the homes where people live. We need homes side by side with jobs.
I know that the Minister cares passionately about the issue, but it is wrong that the funding was removed just like that with no time for people to prepare for its removal, and it is also wrong that the transitional funding of about £30 million, which would allow only for the further demolition of properties, should have been put in place without addressing the real capital needs for investment in our areas. It might seem to the Minister that the demolition of the remaining acquired sites is the best use of that transition fund of £30 million. However, if we consider the ongoing costs of vacant sites, which have no maintenance budgets whatsoever, it is not the right way forward to restrict the criteria on how that transition funding can be spent in the five most distressed areas to paying for demolition. Will he work with those five areas, which are represented here today, and officials in those areas? More importantly, will he look in a cross-cutting way at other Government policies? When he replies to the debate, I hope that he will indicate to hon. Members who are present today how the Government’s post-comprehensive spending review policies on housing market renewal relate to the Government’s economic policies on local enterprise zones and to the work that is coming out of the Treasury.
In Stoke-on-Trent, we hope that the Minister’s Department will support our application to establish a local enterprise zone. If that local enterprise zone goes ahead, it will border one of the areas for which we are seeking these transitional payments for housing market renewal, which is the Middleport area of my constituency. The same point applies to other areas on the periphery of what we hope will be the local enterprise zone. Will he look at how the investment that we need in housing in those areas can be provided—perhaps through a ring-fenced amount of money—to help us to deal with the absolute void that has been left by the Government pulling the plug on finances for housing market renewal?
I want to discuss the regional growth fund. It is extraordinary that the Government have indicated that what has been taken away with one hand will be provided with the other through applications that meet the criteria for the regional growth fund. Those of us who have attended meetings with Lord Heseltine know that the regional growth fund is already stretched and that it will not be ring-fenced in any way for housing investment, but without the homes to go alongside the jobs that we hope will come from the regional growth fund, people in our areas will not be able to get back on their feet in the way that was envisaged when the housing market renewal programme was first introduced.
There is another cross-cutting issue, which is the local government finance relocalisation of business rates. It is a huge issue. If the Minister thinks that what the Treasury does about relocalisation of business rates and the consultation about those plans that will take place throughout the summer recess—perhaps away from media attention—will have no bearing on areas where we are fighting to get back economic prosperity after economic failure caused by structural reasons that we know only too well, I urge him to think again. Can he tell us how the proposal for the equalisation of business rates, and the giving of powers and funding to local authorities to meet the genuine needs of their areas, will have any chance of success when it appears that, as a result of the coalition agreement, areas such as the City of London will carry on receiving huge amounts of money? Such areas do not have economic failure—if their money goes into the pot, they get to keep it for themselves—but what about areas such as Stoke-on-Trent, which stand to lose money? Stoke-on-Trent stands to lose £26 million, which is on top of the £36 million in local government funding that has already been taken away from our area by the CSR.
I have already been in touch with the Department for Communities and Local Government about this issue, but will the Minister ensure that his officials work with those of us who are on the ground and who are in touch with the local enterprise partnership, local authorities and local communities to find, by some means or other, a way in which legitimate funding for legitimate regeneration and investment, which meets the needs of local communities that have been left stranded high and dry by the sudden decision to remove the money for housing market renewal and to allow transition funding only to be used for demolition, can be provided?
In Middleport, the Prince’s Regeneration Trust has now purchased the Middleport pottery; we have a Burslem master plan; and local people have a huge desire for housing renewal. I ask the Minister to work with the hon. Members here today, who care so much about their areas, to find a way forward.
It is a pleasure to serve under your chairmanship, Mr Gale. I remember with fond affection that you had to endure my ramblings in Committee during the passage of the Housing and Regeneration Act 2008, alongside your co-Chairman at that time, my hon. Friend the Member for Bootle (Mr Benton), whose constituency, like mine, is a recipient of housing market renewal funding. I feel like we are all back together for a nice reunion.
I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing this important debate on an issue that affects many thousands of decent residents in the north and in the midlands. I have a pathfinder project in my constituency. It extends throughout the Teesside area and incorporates sites not only in Hartlepool, but in Gresham, Middlesbrough and South Bank, which is in the borough of Redcar and Cleveland.
Between 2007 and 2009, I was the Minister in the Department for Communities and Local Government responsible for housing market renewal. I travelled across all the HMR areas when I was a Minister. I met residents in Stoke-on-Trent, Liverpool, Birmingham and Sandwell, and I was struck by their enormous enthusiasm and ambition. They were determined to see a reversal of the slow and painful decline in their neighbourhoods.
My hon. Friend will no doubt recall walking down the high street of what was Coalville and is now Weston Heights in Stoke-on-Trent and seeing the phenomenal transformation that was taking place to turn what was a very run-down estate into one where people are still flocking to buy and rent properties. What a transformation that was, especially when combined with the other transformations in Stoke-on-Trent, such as the brand new hospital and the fantastic regeneration of our schools, and what a damn shame that it has ended.
I agree with my hon. Friend. Alongside our hon. Friend the Member for Stoke-on-Trent North (Joan Walley), we are pushing on behalf of north Staffordshire. I remember seeing the huge ambition in that area, among others.
It is worth going back to the basics of what HMR was trying to achieve. It was trying to stem and reverse long-standing decline in areas characterised by acute housing market failure. In many respects, that was due to an imbalance of one particular type of property in an area. For example, about 37% of all the housing stock in the entire borough of Hartlepool—14,500 properties—is terraced housing. On any measure, that is too much of one particular type of stock, so there is a need to rebalance the stock the town provides to residents—both now and in the future. That was true of other HMR areas.
What struck me most when I had responsibility for this matter—more fundamentally than acute housing market failure—was the disconnect between those areas and economic activity. The areas were blighted by low skills and, often, virtually no employment. To succeed, I felt that housing market renewal had to be linked explicitly to economic success, and that was why, when I was able to announce in 2008-09 an extra £1 billion of funding for housing market renewal, I wanted to link it explicitly with the possibility of securing extra funding and with injecting skills and employment into those areas, with a particular emphasis on apprenticeships for young people.
It is also important to recognise that this was deliberately a long-term programme. Those areas in the north and the midlands were built in the Victorian era to house workers in heavy manufacturing industries. When those industries declined in the post-war era, their economic raison d’être was often lost, and areas have struggled to adapt. Those big social and economic changes cannot be solved overnight, so HMR was deliberately a 15-year programme to put those areas back on a sustainable footing. The abrupt cancellation of the programme, without any other suitable replacement, undoes all the good work that has been done, and sets those neighbourhoods back decades, as my hon. Friend the Member for Liverpool, Wavertree so eloquently said. More taxpayers’ money than was originally planned for HMR will be needed to sort out the social and economic problems caused by the cancellation of the programme.
Since 2006, for every pound of HMR funding in Teesside, we have levered in an additional £1.06 of other public sector investment and 61p of private sector investment. For Hartlepool in particular, the figures are actually much better. Hartlepool has received about £4.5 million of HMR funding between 2006 and 2011, but that has been complemented by £13.7 million of other public funding and an astonishing £20 million of funding from the private sector, so that is more money coming in from private companies as a result of public sector investment. As many as 2,500 private sector jobs in the construction industry have been created or safeguarded as a result of that initiative. If private companies see the Government losing faith in those areas and failing to maintain investment, it is difficult to envisage how private sector money will stay and grow there.
That is frustrating, because Hartlepool has shown how good progress can be made. We have seen the complete redevelopment of Trinity square by a good Hartlepool house builder, Yuill Homes, and it is now a thriving and welcoming area in the centre of town. At the Headway site close to Chester road, 280 terraced properties have been demolished and work on 170 high-quality, mixed-tenure homes has begun. A second of four planned phases is now progressing. The development agreement for the Headway site made provision for raising employment, skills levels and training opportunities, including the provision of apprenticeship places.
Last month, alongside Bob Farrow, a long-standing tenant of the Belle Vue area, I opened the first modern homes in the area, which replace 50 pre-fab and terraced properties. Bob has lived his entire life in the Belle Vue area, having been born in Borrowdale street. With other residents, he has been closely involved in the planning of the new development. It is a myth—if the Minister is going to suggest this—that the programme has had a top-down approach. It has been bottom-up, with residents actively involved in planning the future of the areas. At the opening of the new homes, Bob said:
“I knew when I first saw Housing Hartlepool’s plans for the new Belle Vue estate that it was going to be wonderful, but these fantastic homes have exceeded expectations. Hartlepool residents have been closely following the progress of the new homes and it is great to see them become a reality.”
In the Perth, Hurworth and Grainger streets part of Dyke House, a compulsory purchase order is in process, meaning that several hundred residents, who have been living with uncertainty, are now seeing some progress. Credit for that must be given to Damien Wilson, Hartlepool borough council’s assistant director of regeneration, who alongside me, the three ward councillors—Mary Fleet, Stephen Thomas and Linda Shields—and officers, Amy Waller from the council and Helen Rooney from Housing Hartlepool, have been going to the Hartlepool Rovers quoit club every Friday at 5 o’clock to keep residents up to date with developments.
However, I am concerned that this progress of breathing new life into disadvantaged areas is incomplete, and that people will be left in limbo for years. As the Audit Commission stated in its review of HMR in Teesside:
“This is a particular risk…where so many schemes are at a relatively early stage. There are a number of areas where a large number of properties have been acquired that are awaiting demolition. This has the potential to leave communities living in a very poor quality environment…The slowing down or stopping of interventions will undermine commitments made to communities and damage community confidence in neighbourhoods.”
Through all their policies, the Government are damaging the communities in my constituency and the wider north-east. Economic policy, social and welfare initiatives, and public sector cuts all disproportionately affect my area and focus on neighbourhoods that least have the tools to battle those challenges. Areas such as Hartlepool, Middlesbrough and Redcar and Cleveland are less likely than anywhere in the country to be able to withstand economic recession and public sector cuts. HMR was starting to turn round decades of neglect, economic inactivity and housing failure to provide neighbourhoods with the housing and hope that they deserve. The Government have taken that away without putting anything in its place. For the first time in many years in this country, we have no dedicated urban regeneration funding programme. I hope that the Minister will reflect on what his Department has done, and do something for my constituents and other decent residents across the midlands and the north of England.
It is a pleasure to serve under your chairmanship, Mr Gale, and I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing a debate on an important issue to my constituents, the axing of HMR.
HMR was overall a successful scheme, although I admit there were some problems, which I will address later. I want to address how the ending of the scheme affects my constituency and low-demand areas; some of the misleading statements put out by the Government; and the Government’s £30 million transitional fund.
Let us be clear where we are now: facing human misery. People were given assurances that the HMR red line around their neighbourhood would be a 15-year programme. It was not to be one that would first encourage disinvestment and degeneration and then, at the bottom of that regeneration trough, have the funding pulled to leave streets abandoned, in the worst cases looking like ghettos.
The regeneration did have cross-party support. The Minister himself was once a fan and, from reading Hansard, I note that he was a supporter. The Prime Minister made unequivocal promises back in 2006, when he took the then shadow Cabinet on a visit to Liverpool. While walking along some of the terraced streets, he observed,
“Run-down areas become a magnet for dumping and littering.”
He laid out this Government’s political ambitions, saying of regeneration,
“It’s a huge task. I want the Conservative party to be the party of urban regeneration. The aim is to make our cities better places for people to live in.”
People rightly feel badly let down; that the Government and the Prime Minister have broken their promises. That can be best summed up by Peter Latchford, the former chair of Birmingham and Sandwell pathfinder:
“I am particularly concerned at the message sent to people living in complex and deprived areas when a programme like this is terminated so abruptly. In Birmingham and Sandwell, we showed that the best results come from involving local people; from investing in long-term relationships of trust; from holding ourselves properly to account locally. There is no better way to disillusion such people, who have seen a succession of ‘interventions’ come and go, than to pull the plug halfway through the promised period.”
HMR was successful; it made good progress in some of the most deprived areas. That is according to the Audit Commission, Shelter and the chairs of the former pathfinder areas that oversaw the regeneration. The Audit Commission report published this March showed that the decision to abolish the housing market renewal programme was ill-advised. My hon. Friends the Members for Liverpool, Wavertree and for Hartlepool (Mr Wright) mentioned the benefits identified by the Audit Commission, including £2.2 billion invested in the HMR programme since 2002, £5.8 billion in economic activity and 30,000 new property sites cleared. The HMR kept 19,000 jobs in the construction industry. In Newcastle Gateshead, £60 million in HMR funds, along with contributions from the council and the Homes and Communities Agency, secured £400 million in private investment and delivered more than 4,000 new homes. The Housing Minister is keen to say that we need new homes, so he should be aware of those facts.
I want to put on record the Audit Commission’s summary, as it is important:
“The HMR programme is making a difference to the communities it serves, with fewer empty houses, reduced crime, and more jobs and training opportunities, especially in those neighbourhoods that are more advanced in their programmes.”
It goes on to discuss the Government’s current proposals for a £30 million transitional fund, essentially to fund the evacuation of residents in what, in my opinion, is an attempt to remove the personal misery involved from the broadcast and news media in order to assist the Government politically. The Audit Commission’s summary says that
“the emphasis must be on completing current key interventions; not least to ensure that promises made to communities are met and to reduce the risk of previous investments being undermined by leaving a legacy of uncompleted projects. At this stage there is…a significant risk that neighbourhood regeneration projects stall, leaving communities living in a poor quality environment indefinitely.”
There seems to be no exit strategy and a lot of waste. The sudden withdrawal of funding has left local authorities unable to complete projects that were already under way. The Government should have considered a phased withdrawal from the programme, and the scheme’s management should not have been based on the five reasons the Housing Minister trots out so frequently, all of which I will dismiss.
The first reason is deficit reduction. The Government are ignoring the plight of the areas involved, the promises made and the investment so far. As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said, we had the opportunity not to introduce such a great deficit reduction programme. We are going too far too fast, and it is hurting our communities. The second reason is future funding, to which I will come, and the £30 million in relief, particularly the regional growth fund, which my hon. Friend the Member for Liverpool, Wavertree discussed, and the new homes bonus, to which the Housing Minister keeps returning. The third is waste, the fourth is top-down targets and the fifth is a conflation of over-supply and under-supply in housing markets.
There has been waste in HMR areas, but I remind the Minister responding to the debate that of the five areas for which he is providing funding, Hull, Liverpool and Stoke were Liberal Democrat-controlled, East Lancashire was Conservative and Liberal Democrat-controlled, and Tees Valley had no overall control. It is not a Labour issue. In East Lancashire, Hyndburn’s Conservative council was handing out full market value payments plus relocation grants plus a cash handout of £30,000, and undertaking group repairs at £55,000 a property, which was more than the full value. Significantly, the council never engaged with estate agents or architects on added value or the redesign of properties, nor did it seek the best investment value. I am told that in Liberal Democrat Pendle, £1 million, not including acquisition, was spent converting eight houses into four. Another issue is the lack of Government intervention in Liberal Democrat and Tory-controlled councils.
My hon. Friend the Member for Hartlepool mentioned top-down targets, another issue to which the Housing Minister keeps referring. A pathfinder, as the name implies, is a housing programme in which local authorities were told to find a path. There were no top-down targets that anyone is aware of except the Housing Minister, who said in a reply to my right hon. Friend the Member for Birkenhead (Mr Field):
“Some pathfinder schemes were successful; however, others attracted controversy due to an over-reliance on demolition, in part encouraged by top-down government targets.”—[Official Report, 20 January 2011; Vol. 521, c. 901W.]
The Housing Minister has made that assertion repeatedly. Can the Minister here today name a single top-down target imposed under the HMR programme? I cannot and nor can anyone else—including the Housing Minister, who has failed to provide a single meaningful example so far.
Turning to my constituency, Hyndburn has unfunded areas like those mentioned by my hon. Friends. The future of Woodnook and Peel in Accrington is now unfunded, and I will assert to the Minister the sheer scale of the problem. Residents in the area were consulted in 2005 by the Conservative council. Plans were drawn up and presented that included details such as houses to be demolished and trees to be planted. The Conservative council scrapped those plans and then went into “spend, spend, spend” overdrive in West Accrington. In 2010, the council repeated the process, covering some 70 terraced blocks with 15 houses a block, a considerable number of properties. The hon. Member for Rossendale and Darwen (Jake Berry) was courteous enough to visit last month and recognised the true scale of the problem, but the Housing Minister has yet to come through on his promise to visit Hyndburn and see the HMR-related problems in Accrington.
Residents of 70 blocks in red-line areas believed that their area would be regenerated, but since the cuts in the comprehensive spending review and the axing of HMR, the council has scaled back its plans to include just five blocks. In many blocks outside the area where transitional money will be spent, occupancy rates are between 30% and 80%. A press release from the Department for Communities and Local Government on 9 March this year stated:
“This coalition Government is committed to helping vulnerable people and will not stand by when residents are stranded in derelict neighbourhoods through no fault of their own.”
Five out of 75 blocks are being done and 70 blocks are being neglected, some of which meet tier 1 and tier 2 criteria for the £30 million and have less than 50% occupancy.
As my colleagues have said, £30 million is grossly insufficient. Four blocks that I have looked around make me think of the misery on those streets. Surely the Minister must recognise that that cannot carry on. In effect, even with the £30 million, we are abandoning people in HMR areas. Worse, although some blocks qualify for match funding under the Government scheme, it is ridiculous to think that a local district council could afford to match Government funding to deal with such areas, even though they meet the criteria. We will be abandoning and neglecting people who meet the criteria, despite two previous plans. Such is the desperation of the district council to do something that it is prepared to say whatever it takes to the Government in order to get any crumbs that might help people. The council knows that it is abandoning residents because it has been shorn of Government funding, and the private sector does not want to know. We risk facing blight compensation notices.
The Housing Minister conflates over-supply and under-supply, trotting it out as a reason for the shortage of housing in the UK. He said on 17 January:
“The housing market renewal programme was responsible for demolishing a large number of homes—so many that there are fewer affordable homes after the 13 years of the previous Government than there were when they got into power in 1997.”—[Official Report, 17 January 2011; Vol. 521, c. 535.]
A conflation of the south-east and the north-west is imaginary and unhelpful, as it belittles the truth. There are more houses than people in significant parts of the north. Is the Minister not aware that Liverpool’s population used to be 1 million but is now nearer 450,000? East Lancashire’s population has fallen. There are more houses than people; demand is low.
Is the Housing Minister so lost from his brief as to be unaware that there are 750,000 empty properties, most of them in the north? People do not want those homes, the private sector does not want them and hard-pressed councils have no money to deal with them. Is he really suggesting that the cure for low demand is for people from the south-east to move to the north? If so, is that official Government policy, and what is he doing about it? That is what he seems to be suggesting. How else will we fill those houses? If not, he should refrain from suggesting that there are more people than houses, for that embarrasses his own position.
My hon. Friend the Member for Liverpool, Wavertree touched on the regional growth fund. The Housing Minister told the House of Commons one thing that seems to be totally untrue, and he needs to address the fact that he has misled the House. As my hon. Friend said, the chair of the regional growth fund said that it will not accept funding bids, so for a long time those communities were led to believe that there would be a future, but there is none. I am sure the Housing Minister will be haunted by his words:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work”—[Official Report, 27 October 2010; Vol. 517, c. 1114.]
I want to address a second point that the Housing Minister touched on—the new homes bonus—because it is not only on the regional growth fund that he has misled the public. He has repeatedly confirmed that the new homes bonus will supplant HMR, yet figures distributed by the House of Commons Library show that my constituency received just £62,000. Is the Minister aware that the average price for acquisition is £77,000 in West Accrington and £45,000 in East Accrington? The difference is that one has had intervention and the other has not. That £62,000 will barely buy one house. When we find out that the new homes bonus will buy so few bricks, stones and slates, is the Housing Minister not embarrassed by his comment that the new homes bonus will assist HMR areas?
It is not only a Hyndburn issue. East Lancashire has some of the worst housing in the country, yet its five HMR local authorities are recipients of the lowest new homes bonus payments in the UK. All five feature in the bottom 27 out of 350 authorities and receive less than 90p per head in new homes bonus payments. Hyndburn receives 78p per head, while leafy Uttlesford receives £9.30 and conservative Tewkesbury £6.47. How is that fair? How is that consistent with the Housing Minister’s extravagant funding claims?
Given that there are more properties than people, it is no good the Minister saying that we will be rewarded for filling empty homes and that there is an empty homes budget. How? How will we get people into those houses? Empty properties are a revolving door. The Housing Minister is making ridiculous arguments. I presume he is suggesting that people leave delightful Tewkesbury and Uttlesford, where they want to live and where there is high demand, and move to Woodnook, Peel or Accrington, where there is little or no demand. When he makes those generic comments, I would like him to explain how he will square that circle.
Crime hot spots and human misery are key issues. Families remain trapped in deserted streets where projects have been abandoned. Those areas attract crime, with several experiencing arson attacks, which makes it very dangerous for those living there. Stuart Whyte, the chair of Gateway Hull and East Riding of Yorkshire pathfinder, said:
“The areas have increasingly become a magnet for crime and anti-social behaviour. Beyond this human misery the sudden withdrawal of funding has a major impact on the willingness of the private sector to invest in the areas.”
Mike Gahagan, former chair of Transform South Yorkshire pathfinder, said that
“the sudden termination in HMR funding has left many families in distressed surroundings”.
The Government have an obligation, and forcing local councils to accept liability will not make the problem go away, particularly in lower-tier district councils, which cannot raise the finance. The Liberal Democrat leader of Burnley council, Charlie Briggs, said:
“£30 million remains insufficient to meet the area’s needs. We need a policy and funding that gives us a bridge to Mr Shapps’ new world. We are in touching distance of a revitalised housing market. It will be disgraceful if the government now pulls the rug on us and, more importantly, our communities.”
That is a Liberal Democrat leader—it does not even come from the Opposition.
The Government are nowhere on regeneration. Their own document, “Regeneration to enable growth”, is an embarrassing three pages long, followed by some cut-and-pasted tables. Is that their position on regeneration—three pages? When the Prime Minister visited Liverpool, he put Lord Heseltine in charge of regeneration, stating:
“I am delighted to be here and announce the setting up of a Cities Task Force which Heseltine has agreed to chair. He has a great record in helping with urban regeneration and is a great friend of Liverpool’s.”
Questioned at last week’s Select Committee on Communities and Local Government, Lord Heseltine had this to say on regeneration: there is a paper out on regeneration; it
“is called ‘Going for Growth’ or something.”
It is actually called, “Regeneration to enable growth”. It is clear that the Government have abandoned regeneration and HMR. Those the Prime Minister has made responsible for it know so little and the Government do not care enough to do something about it. Perhaps the Minister has recognised that the Government have conveyed confusion and misinformation, and will eventually come back to the nub of the issue. The problem will not go away.
In closing, I note that last Tuesday the Housing Minister announced that he would look at a new fund. My hon. Friend the Member for Hartlepool has put the questions—where is that new fund and what will it do? Will it include the existing HMR areas? Will it be part of a strategic plan including public and private finance? Crucially, in my constituency, will it be more than the embarrassing £62,000 the Government provided in the new homes bonus fiasco? I close my comments there, Mr Gale. Thank you.
It is a pleasure to serve under your chairmanship for the first time, Mr Gale. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing the debate and my hon. Friend the Member for Hyndburn (Graham Jones) on tenaciously pursuing the issue of housing market renewal.
Hon. Members will, I hope, be aware of early-day motion 1970 on housing market renewal, which I sponsored not only because it affects huge swathes of my constituency, but because we need to secure a fair deal for all the former HMR areas. The Chancellor once told us that we are all this together, and perhaps that is partly true in this case—at least, “we” on Labour Benches representing ordinary, working-class constituencies might be in this together, but certainly not “we”, as in the royal “we”, representing leafy suburban areas such as Tatton, Witney and South West Surrey.
[Mrs Linda Riordan in the Chair]
Despite the unbelievable transformation of our city during 13 years of Labour Government, Liverpool’s socio-economic problems are common knowledge and have been touched on by my hon. Friends. The problems are disproportionately concentrated in north Liverpool and their consequences correspondingly magnified. There is a complex and historical mix of issues, such as low educational attainment, a low skills base, high welfare dependency, poor housing, low or unskilled and often casual employment, and poverty of aspiration. Those factors have made for a potent, self-perpetuating, cyclical cocktail of disadvantage and marginalisation. I have spent more than two decades working hard for Liverpool, and I am determined to continue that fight here today.
In the 12 pathfinder areas, there was demonstrable market failure in the housing sector and the £2.2 billion housing market renewal initiative essentially recognised what we needed to do to tackle poor housing conditions. Despite some justifiable criticism that it was not always sufficiently focused or sufficiently geographically specific to meet Liverpool’s needs, it started to address one of the multiplicities of interconnected problems that areas such as my constituency face. It was housing market failure that created neighbourhoods with a large number of vacancies, owners trapped in negative equity and the unwelcome attention of speculators. I concede that the scheme was not perfect, but, much like the future jobs fund, it was at least a programme to address specific needs. For that reason, moderate reform rather than radical abolition would have been the sensible thing to do, but, no, not for this Government.
Despite what I am sure were its best intentions, the previous Lib Dem city council in Liverpool got things disastrously wrong, and now the Liberal Democrats and their Tory partners are trying to finish us off completely. Instead of taking a break, as they did with the health care reforms, to consider all the options available, the coalition Government have simply turned off the regeneration tap in areas such as Walton. In this very Chamber, only two weeks ago, I led a debate on the construction sector and highlighted the damage that the scrapping of HMR and other initiatives was doing to the industry. It is generally accepted that HMR alone has generated £5.8 billion-worth of economic activity and created 19,000 construction jobs. So the Government’s decision to scrap HMR was devastating not only for residents trapped in properties in areas that look like they have been bombed, but for the construction industry in general. It would not have been so bad if the Government had recognised the serious socio-economic problems of HMR areas, but instead they have once again hit the most deprived parts of the country hardest.
Government Members are desperate to blame the previous Labour Government by using the tired old mantra that it is all our fault, but the economic argument is that for every £1 invested in construction, £3 is generated and a further £2 is generated in the wider economy. So, instead of paying benefits to building workers who are desperate for jobs but who are forced to sit at home, the Government could have invested in construction to ensure a return on their investment and the creation of jobs and apprenticeships. The Government chose not to do that; instead, they chose to cut and run.
It is disappointing that the Minister for Housing and Local Government is not responding this morning to our serious questions—metaphorically speaking, this is not the first time that a Lib Dem has taken a bullet for his Tory master. The Minister will be keen to lay the blame squarely at the door of the previous Labour Government. However, whether or not there was money in the Exchequer, there appears to be an ideological motive for this callous and cynical decision, which has caused so much distress in areas such as Liverpool.
Thank you, Mrs Riordan, for your chairmanship—albeit rather briefly—of the debate. I draw hon. Members’ attention to the entry in the register made by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) in which I have an indirect interest. I congratulate my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) on securing the debate. It has been marked by excellent contributions and a strength of feeling expressed by my hon. Friends, whose constituents are most affected by the Government’s complete volte-face on funding for the housing market renewal programme.
The Minister should not be surprised by the anger and frustration voiced today, when the messages from his colleagues indicate yet again that the left hand does not know what the right hand is doing. The decision to cut half the money promised by the Government at the Dispatch Box by the Minister for Housing and Local Government as recently as October 2010 has been devastating. Many hon. Members have commented on his absence today. I can tell hon. Members that, as we speak, he is busy tweeting about holding a round table on social mobility. In that round table, I hope that he is talking about HMR and the impact of his policies on social mobility.
It is worth noting and repeating the precise words that the Minister for Housing and Local Government used:
“We will complete all the committed HMR schemes, and we will then roll the funding up into the regional development fund to continue the good work.”—[Official Report, 21 October 2010; Vol. 516, c. 1114.]
Is that not pretty unequivocal? He then confirmed the position in a letter to local authorities, in which he said:
“we will also provide access to the Regional Growth Fund to fund capital projects which could support housing growth”.
I suppose we should be getting used to Ministers saying one thing in Parliament one day and then changing it the next. Most recently in fact, just a couple of weeks ago in a debate on social housing in this Chamber, the Minister for Housing and Local Government made a number of statements that he has subsequently had to correct or elaborate on. There were seven such instances in all, including one policy change. I hope that the Minister responding today will not find himself having to come back with a stream of corrections. There is a question of competence here.
It is therefore a shame that Lord Heseltine, who has been tasked with heading up the independent approval panel for bids to the regional growth fund, does not appear to be singing from the same hymn sheet. Perhaps he is as confused by the Government’s constant chopping and changing as the rest of us. When he was pressed by the Select Committee on Communities and Local Government, he was very clear indeed that the regional growth fund is not in any way a replacement for housing market renewal funding. What happened to the circular that the Minister put out? Did Lord Heseltine simply ignore it, or perhaps the status of the edict from the Department for Communities and Local Government was simply lost on the chairman of the approval panel. To his credit, Lord Heseltine has a considerable understanding of regeneration projects and, after the Toxteth riots, he got heavily involved in trying to make significant changes and improvements to some of the country’s most run-down communities through regeneration. There were, of course, two housing-related bids in the first round of bidding with one in Hull and one in Wakefield, but since then the emphasis has clearly changed.
It is telling that the Localism Bill does not mention the importance of regeneration to some of our poorest communities. However, let us be honest. That is not the Government’s vision for the new powers that the Bill will introduce. The bids already in for neighbourhood forums support the view that those powers are largely for affluent areas in the south-east or in the suburbs of our major towns. Neighbourhood forums are not being set up in Hyndburn, for example. Perhaps those marooned local residents should be thinking about setting up a neighbourhood forum in order to try and have a say in how their community might be shaped in the future—not, I hope, under a Tory Government.
Why did the former pathfinder chairs feel the need to press the case for the full £60 million to remain committed? They know, because they have worked on the ground, just how important it is to rebalance and invest in these communities. They also know the cost of not proceeding and the waste of investment that has already been put in. Perhaps the Minister should read his own Department’s discussion papers in which it is clear that in order to tackle worklessness the lack of aspiration needs to be dealt with. Part of that is about people feeling valued. Someone’s home and their wider environment play a significant role in that. Let us imagine waking up every morning in a semi-derelict landscape, where all the community facilities and local shops are closed. It is almost impossible to conceive how dispiriting and demoralising that must be. If the Government are serious about the private sector stepping in to support new jobs, they need the conditions for that to happen. The private sector will not move into derelict sites where no one, including their potential workers, wants to live. There needs to be some pump-priming.
My hon. Friend the Member for Hartlepool (Mr Wright)—a former very respected Housing Minister, who understands the nature of the problem—set out clearly the reasoning behind the scheme and, most importantly, the economic benefits. The Government have taken a number of decisions that have impacted seriously on house building, regeneration and, as we have heard, the construction industry. This Government’s decision arbitrarily to select just five areas for continued investment and to allow councils to ignore the regional house building targets resulted directly or indirectly in plans for more than 200,000 homes being dropped.
My hon. Friend the Member for Liverpool, Wavertree has highlighted the problems and has mentioned some of the excellent work using previous funding to try to lift some of the affected areas. During the recess, I hope to see at first hand some of the problems that she has described so vividly. My hon. Friend the Member for Hyndburn (Graham Jones) gave a wide-ranging and expert analysis of HMR and its importance to the area that he represents.
My hon. Friends the Members for Stoke-on-Trent South (Robert Flello) and for Stoke-on-Trent North (Joan Walley) described how the scheme was just starting to have an impact. Clearly the rug has simply been pulled from under the feet of those concerned. My hon. Friend the Member for Stoke-on-Trent North made a plea for a cross-cutting approach. Sadly, I have to tell her that the Government are simply doing the cutting part. She also touched on business rates, which are extremely relevant. That was a point very well made. I hope that the Minister will take that away, because the impact on areas such as hers could be significant if, again, the decisions taken are the wrong ones. My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) is an assiduous debater on this and related issues. He flagged up an alternative, more pragmatic approach that the Government might have followed and pointed out that they simply chose not to do so.
Labour Members have tried hard to clarify this matter and have raised the issue on the Floor of the House. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey), who is in this Chamber today, has—I hope he will forgive me for saying this—been like a dog with a bone. He, too, has written to the Minister for Housing and Local Government, most recently on 29 June, but there has been no answer. Perhaps the Minister for Housing and Local Government has been too busy writing corrections to the previous debate. My hon. Friend asked some straightforward questions in his letter, many of which have been asked again today by my hon. Friend the Member for Liverpool, Wavertree, and I shall add to her list. Will the Minister make it absolutely clear whether Lord Heseltine is correct in saying that the regional growth fund will not cover HMR or anything of that sort?
Importantly, my hon. Friend the Member for Liverpool, Wavertree also asked whether bids, which have been prepared at some cost to local authorities, will be considered at all by the approval panel. If not, will local authorities be reimbursed, given that they were quite clearly sold a pup by the Government? Perhaps in the absence of a written reply from the Minister for Housing and Local Government, the Minister can, in summing up, answer all those questions, because he will have adequate time to do so. I hope that we get good, full, oral answers and that we do not have to wait for updated written answers.
It is a pleasure to serve under your chairmanship for what I think is the first time, Mrs Riordan. I congratulate the hon. Member for Liverpool, Wavertree (Luciana Berger) on bringing this subject to the Chamber. I should perhaps say that my right hon. Friend the Minister for Housing and Local Government recently met the hon. Lady to discuss regeneration in her constituency. He also took the opportunity to visit Merseyside in May to see the work being undertaken in both Liverpool and Sefton. I have also visited Liverpool, so I have seen successful, and perhaps less successful, schemes and their outcomes.
I just want to reinforce a point that I made earlier. One reason for securing the debate is that while the Housing Minister did come to Liverpool, during a meeting there that was attended by a wide range of people from the local communities affected by the cut to HMR, he said that we in Liverpool could apply for money from the regional growth fund. As that has now been proven to be not the case, further to the evidence given by Lord Heseltine in the Communities and Local Government Committee, it is really important that we receive answers about that today.
I certainly intend to give answers about that.
Perhaps I should say something about the baggage that I bring to the debate. I first secured elected office in 1979, having run a successful local campaign to prevent the wholesale demolition and redevelopment of homes in Chester. I am happy to say that those homes are still there and are now seen as highly marketable assets. We all bring different stories and different perspectives to the debate. I am well aware that good regeneration work has been undertaken in Merseyside and elsewhere, and I am also well aware of the challenges that have been faced in the area. The hon. Member for Liverpool, Wavertree mentioned the Picton and Kensington renewal areas in her constituency.
Several contributors to the debate have acknowledged that not all housing market renewal schemes got off on the right foot. Not all of them were pursued in the right way and, in fact, not all of them were appropriate. A number of them certainly generated significant local controversy and failed to engage properly with local communities. Quite often, the renewal process divided local opinion. Amid the understandable passion that has been brought to the debate, it is important that we keep some perspective on that particular point.
I shall start by responding to some of the specific points that were raised before going on to deal with several of the broader points that I think need to be set out. The hon. Member for Stoke-on-Trent North (Joan Walley) asked for several specific assurances. Officials from my Department are more than ready to work with Stoke-on-Trent council and others on the future direction of the north Staffordshire regeneration area. Indeed, officials are already in discussion on the basis of the bids and applications that have been put in for the £30 million match funding that has been referred to, so I am happy to give her that assurance. I have visited Stoke-on-Trent and looked at some of the situations that she described.
My concern is not just about the transitional fund and securing our share of it, because that is geared towards demolition. I want to see how all the different funding can be aligned so that we can get investment in homes, communities and local regeneration. If the Minister can help with that, I will be very happy to do whatever I can to facilitate it.
At the risk of having to issue a correction—I do not have a magic wand—I can say that those discussions will be wide-ranging. Of course, they can be as wide-ranging as Stoke chooses to make them.
I want to move on to something that I am sure the hon. Lady will want the official discussions to cover. She mentioned the link between enterprise zone applications and regeneration. She is absolutely right to say that there should be as much synergy as possible in public investment, or in public stimulation of private investment, in both of those. It is entirely right and proper that discussions range across the boundaries and that we should not put these things in separate silos.
The hon. Lady also asked specifically about the local government resource review and the Government’s announced, albeit not yet detailed, proposals for returning business rates to local authorities. I do know the answer to her question; indeed, it has been given from the Dispatch Box. However, she will have to wait for the detail of that answer for one or two weeks, when we actually publish the proposals—the correct civil service word for that is probably “imminently”. I assure her that neither Stoke-on-Trent nor any other local authority will find themselves at a financial disadvantage in the first year of the operation of the scheme. It is central to the proposals that we are bringing forward that that should be the case.
I realise that time is short, but our concern is not just about being disadvantaged in the first year; it is about the level on which future decisions are made. We could well find ourselves falling severely behind after three years. Will the Minister please feed that back into the final version when he announces it in two week’s time?
Just for absolute clarity, I would appreciate it if the Minister would clarify something that he said. He stated that authorities would not be disadvantaged in the first year. Given that many of these housing and regeneration projects are much longer programmes, I think that we would all have serious worries if, after the first year, those authorities were disadvantaged as a result of the changes.
I was responding to the suggestion that Stoke-on-Trent might lose £26 million. Stoke-on-Trent will not lose £26 million. I think that I have already made our intentions clear. There have been some other statements, but the detail of the scheme will be well debated when it is published, so I think it is best if I go on to respond to several of the other points that were made in the debate, if I may.
It is way over the top for the hon. Member for Hartlepool (Mr Wright) to say that the Government’s decisions have set areas back by decades. That is absolutely not the case. Investments have been made and, even in this debate, reports have been given of their success. It might be said that there is a greater belief in the successes among Opposition Members than Government Members. It is absolutely not the case that such work will be set back as a result of the decisions that have been made.
I want to link that to what the hon. Member for Hyndburn (Graham Jones) brought to the debate. I leave aside his dismissal of deficit reduction, because that sensible Government aim underpins our whole financial strategy. The hon. Member for Hartlepool must be well aware of the deficit problems found by the incoming Government. However, the hon. Member for Hyndburn cannot have his argument both ways: it seemed to be that the fundamental difficulty in east Lancashire was too many homes and not enough people, in which case it can hardly be wrong if the new homes bonus generates more houses in places with more people than it does in places with an excess of houses. I want to tell—
I might give way in a moment, but not until I have finished my sentence at least.
I want to tell the hon. Gentleman that the £62,000 is the first payment in six years of payments on the homes brought into use in his area in the past year. That will be augmented by the homes brought into use in successive years. That £360,000 is real, additional money that Hyndburn would not otherwise have received. Some local authorities—Sefton metropolitan borough council, for instance—have used the incoming income as an underpinning guarantee to raise loans and finances in order to proceed with regeneration. That was one of the projects that my right hon. Friend the Housing Minister visited in Merseyside a few weeks ago.
I was clear about what I said: if there is an oversupply of houses—more houses than people—there is low demand, and therefore, naturally, less from the new homes bonus. Hence we end up with the figure of £62,000, which is the 11th lowest in the country. The argument is perfectly logical, but it falls down when the Housing Minister says on the Floor of the House that we should not worry about losing housing market renewal because we will get the new homes bonus. That is where the argument falls down; the rest is linear with all the ducks lined up—that is my point. On the Under-Secretary’s mention of extra money, the new homes bonus is being top-sliced from the formula grant after year two, and it is also being taken from the planning delivery grant, so I do not accept his point.
First, my right hon. Friend the Housing Minister has certainly not said that regeneration will be funded by the new homes bonus—his point was that it is an important contribution. The example of Sefton shows that local authorities are well able to exploit that and to benefit.
Clarity on the issue of the regional growth fund is of the highest importance in circumstances in which the Minister for Housing and Local Government has treated the House with contempt by not being here today and by not replying to my letter of 29 June. The Housing Minister has said on the Floor of the House and in a letter to local authorities that the regional growth fund can be accessed for capital projects to support housing growth. However, Lord Heseltine has said that housing renewal is not being addressed through the regional growth fund. He went on to say:
“perhaps any minute now I’ll get a letter”.
Perhaps any minute now we will get an explanation or a letter—or both.
I have a final point to make while I am on my feet. Earlier, following powerful representations from Members of Parliament affected by the cruel cutting short of a visionary programme, the Minister described what they said as “sob stories”. Will he take the opportunity to withdraw what he said?
Let us focus on the regional growth fund because time is limited. The spokesperson for the Opposition said that round one of the regional growth fund supported bids in renewal areas in Hull and Wakefield, so it is absolutely not the case that regeneration projects are not being funded by the regional growth fund.
I was not privy to the evidence of Lord Heseltine, but I have seen the reports and heard the quotes, and he said that the terms of reference of the regional growth fund are to promote—funnily enough—growth in the regions. There is no automatic link to housing market regeneration projects although, as hon. Members have mentioned, there are employment, environmental and social benefits to successful regeneration. I take it as clear that the bids accepted from Hull and Wakefield must have met the criteria of supporting growth, as well as the social and environmental criteria about which hon. Members have spoken today.
The bids for round two of the regional growth fund have been submitted and are, no doubt, being evaluated by Lord Heseltine’s advisory committee. The bids are signed off by the Government.
We need absolute clarity: are we therefore returning to the original position? In the Housing Minister’s letter to the local authorities, he said:
“we will also provide access to a Regional Growth Fund to fund capital projects which could support housing growth”
and housing renewal. Are the Government now saying that the regional growth fund can be used for such purposes?
Not only that it can, but that it has. In Hull and Wakefield, it has been used for such purposes. All bids must be evaluated, their strength must be measured and their contribution to growth must be considered. It is therefore not the case that a large slice of the regional growth fund is diverted into social and housing regeneration. However, when social and housing regeneration can contribute to growth, a project will be not only eligible but, as in the cases of Hull and Wakefield, successful.
I will now make some progress—
No, I will not give way. I have made the point absolutely clear and I am moving on.
On the former renewal programme, the reality of the fiscal deficit means that we have had to take tough decisions about where savings can be made and to ensure that we focus on growth. The previous Government’s programme was far too centrally driven from Whitehall and, by proxy, sometimes too centrally driven from town halls. It included targets for demolition and, in that sense, it was all too literally top-down, as the hon. Member for Stoke-on-Trent North acknowledged. It resulted in imposed schemes that were often resented by local communities and created as many problems as they solved. That approach has not worked, and has often resulted in blighted areas in which large-scale demolition and clearance projects have come to a standstill.
In my last minute, I shall speak about the sum of £30 million, which is to be matched by other funding. Bids have so far been received from all five eligible areas and the indications are that the match funding will be available, thus allowing £60 million to be spent. That £60 million is the assessment of what is needed to get the existing schemes into a shipshape position—viable environmentally and locally—so that the next stage of development in those areas can happen. There is a process, and I can tell the hon. Member for Liverpool, Wavertree that Liverpool city council has submitted a substantial bid. Officials will consider it and, no doubt, will make recommendations to Ministers in due course. We are ensuring that, at the national level, £261 million is available for market renewal in 2010-11, which is a substantial amount. Also, the reason why the five were chosen was not arbitrary, but because of the improvement in those areas—