HOUSE OF COMMONS
First Standing Committee on Statutory Instruments, &c.
DRAFT GRANTS BY LOCAL HOUSING AUTHORITIES (APPROPRIATE PERCENTAGE AND EXCHEQUER CONTRIBUTIONS) ORDER 1989
Tuesday 20 December 1988
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The Committee consisted of the following Members:
Chairman: MR. MICHAEL MORRIS
Abbott, Ms. Diane (Hackney, North and Stoke Newington)
Alison, Mr. Michael (Selby)
Banks, Mr. Tony (Newham, North-West)
Battle, Mr. John (Leeds, West)
Bright, Mr. Graham (Luton, South)
Fallon, Mr. Michael (Darlington)
Finsberg, Sir Geoffrey (Hampstead and Highgate)
Forman, Mr. Nigel (Carshalton and Wallington)
Gorst, Mr. John (Hendon, North)
Haselhurst, Mr. Alan (Saffron Walden)
Hayhoe, Sir Barney (Brentford and Isleworth)
Heddle, Mr. John (Mid-Staffordshire)
Howarth, Mr. George (Knowsley, North)
Litherland, Mr. Robert (Manchester, Central)
O'Brien, Mr. William (Normanton)
Shaw, Sir Giles (Pudsey)
Taylor, Mr. Matthew (Truro)
Trippier, Mr. David (Parliamentary Under-Secretary of State for the Environment)
Rose, Mr. J. R. (Committee Clerk)2 3 First Standing Committee on Statutory Instruments, &c. Tuesday 20 December 1988
[MR. MICHAEL MORRIS in the Chair.]
The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier): I beg to move, That the Committee has considered the draft Grants by Local Housing Authorities (Appropriate Percentage and Exchequer Contributions) Order 1989. It is a pleasure to see you chairing our proceedings, Mr. Morris. The need for the Order arises from changes made by section 131 of the Housing Act 1988 to Part XV of the Housing Act 1985 in order to extend the availability of Home Improvement Grants to landlords who wish to let their premises on assured tenancies. The arrangements set out in the Housing Act 1985 for the payment of Home Improvement Grants provide for the specification by order of the percentage of the total cost of the relevant works which a local authority may pay as grant to a private person and the percentage of the expenses so incurred by the local authority which may be contributed by the Exchequer. The Order now before the Committee makes two changes from the order currently in force. Those relate to the rates of grant payable to landlords for intermediate grants and for mandatory repairs grants. No changes are proposed to the rates of grant payable for improvement grants, special grants, common parts grants, discretionary repairs grants or intermediate grants or mandatory repairs grants to owner occupiers; nor are there any variations to the percentage of exchequer contributions currently payable on any particular rate of grant. I should perhaps explain at this stage that intermediate grants are always mandatory and that they are always available for the installation of missing standard amenities, along with associated repairs. Repair grants are available for substantial and structural repairs to houses built before 1919. They are normally discretionary, but they are mandatory when they relate to the execution of works specified in a repair notice served under sections 189 or 190 of the Housing Act 1985. The reason for extending through the Housing Act 1988 the availability of home improvement grants to landlords of assured tenancies is to encourage such landlords to undertake the work necessary to bring property which may currently be unconverted or vacant and in a poor state of repair onto the market. Assured tenancies will yield a higher rental income than regulated tenancies. That means that it would normally be inappropriate to provide grant-aid at the same level. 4 We expect, therefore, that in approving applications for discretionary grants, local housing authorities will take account of the anticipated form of tenure of the property and the likely future financial arrangements and circumstances of the applicant when determining the rate of grant to pay within the maxima specified in the relevant order, and we will be issuing advice to authorities to that effect in a circular to be published when the order currently before us comes into force. In the case of mandatory grants, however, the terms of the legislation do not allow local authorities any discretion in determining the rate of grant to pay a particular applicant. We therefore need to make provision in the order now under consideration for a lower rate to be payable to landlords. Ideally, we would have liked to have been able to specify a separate, lower, rate of grant to be paid to landlords letting their premises on assured tenancies and a more generous rate for landlords of regulated tenancies. However, given that, in practice, there is no way in which an authority can ascertain with any degree of certainty at the time at which an application is submitted whether a landlord will subsequently let his property on a regulated or an assured tenancy, the specification of different rates of grant for different forms of letting would have been impracticable. This means that the effect of the order now before us will be to reduce the rate of grant normally payable to all landlords applying for intermediate or mandatory repairs grants to 20 per cent. However, in order to safeguard the position of landlords of known regulated tenancies who would otherwise be unable to finance the necessary works, the draft Order includes a facility to enable authorities to pay grant at a rate of 90 per cent. of the eligible expenses in cases of real financial hardship. There is one final point which I should mention. The legislation provides that an order such as the one now before us should have effect with respect to applications for grant approved after such date as is specified in the Order. In drafting this Order, we have chosen to relate its effectiveness to all applications made on or after the date on which the Order comes into force, on the basis that no application can be approved until it has been made. We have adopted this course of action, as we did in relation to the Order relating to rates of grant for special grants which was made earlier this year, because we feel that, given that applicants are to receive a lower rate of grant than under the current arrangements, it would be unfair if applicants who has already submitted their applications well before this Order was even published in draft, and who therefore had no means of knowing about the new proposals, were to be penalised simply because the local authority had been unable to approve the application before the Order comes into force. I commend the Order to the Committee.
Mr William O'Brien (Normanton): We, too, are pleased to see you chairing our Committee, Mr Morris. We are also pleased to see the honourable Member for Pudsey (Sir G. Shaw) in his place as the Whip. Obviously, the Opposition welcome any proposals to improve housing. The devastating part of the Order is that the amount of money to be made available is totally inadequate. Grants to landlords are a new feature and we take note of that. It invites comment because of the way 5 that grants to landlords will apply and the guarantees that those will be for houses on short-term or other kinds of tenancies. The Minister referred to the fact that applications apply, mainly, to pre-1919 houses. Consideration should be given to houses built after 1919 because the need to upgrade some houses in the private sector built after 1919 should be seriously considered. It is becoming increasingly more difficult for people on ordinary or low incomes to afford decent housing, and many people who want improvement grants just cannot get them. In the past, the Government encouraged people to apply for improvement grants, but they then reduced the amount of money available, so that people were added to a waiting list. There is now a significant waiting list for grants and a backlog has developed in many areas. One intriguing feature of this issue of grants for improvement or repair of houses is that the Department of the Environment failed to publish an overall figure for disrepair, which is the traditional indicator of what is needed to bring housing up to scratch. The total number of houses in disrepair and the cost is not recorded. The Department should consider that because those figures are a barometer of what grants are needed to bring houses up to a good state of repair. According to the English house condition survey published on 28th November, out of 18.8 million homes, 6 per cent. are in a state of serious disrepair, and the proportion of unfit houses is just short of 6 per cent. Those percentages have changed little over the past few years. No progress is being made, and the Department of the Environment should investigate that, with a view to improving and bringing up to standard such examples of disrepair. The change in the basis of defining homes in poor condition makes the total repair bill difficult to estimate. The Department of the Environment has divided housing into three groups—urgent repairs, repairs which if postponed would mean a sharp rise in costs, and comprehensive repairs needed to secure the minimum term and meet mortgage conditions. Therefore, various descriptions should be clarified so that people can understand the Department's terms for houses in need of repair. The survey said that for half the homes the cost of urgent repairs was around £170 each, but 5 per cent. needed £3,000 or more to be spent and a quarter needed £2,200 spent on them. The report also revealed that 2 million homes are inadequately heated and about 1 million are in need of rewiring. The majority of those houses are owned or tenanted by old people or people on low incomes, so finding money to cover the difference in the grant can be difficult for them at times. Poor housing is associated with low incomes, so there is a greater need now more than ever for money to be made available. It is the older housing stock that we must maintain. A report in The Scotsman highlighted the connection between ill-health in children and damp housing; children under five particularly are badly affected by this problem in housing repair and maintenance. The local authorities are not now building houses for rent because the Government have reduced the amount of money available for that. The need for them to maintain the housing stock in good condition is significantly heightened by the fact that no new local authority houses are becoming available to let. Local authority housing must also be considered for general 6 improvement, and as I said earlier, the Department should seriously consider making houses built in the late 1920s and early 1930s eligible for house improvement and grant. The Minister should consider the use of accredited builders to carry out work financed by grants. I would like to see local authority building departments financed by grant, to ensure that any work would be carried out to the best possible standard. Builders who canvass for house improvement work should do so with approved backed insurance schemes. The cowboy schemes should be outlawed. As a result of the change in social benefit, it would not be easy for a widow or couple on social benefit to obtain help from the Department of Social Security to carry out necessary work to keep houses in good repair. Assistance for elderly and disabled people to maintain their properties through community programmes has now gone and there is a general and urgent need for the Department of the Environment to look at that problem. There is a great void there, and it is difficult to see how those people will be able to maintain their properties as there is now no assistance from the community programme schemes that used to operate before 1st April this year. Some investigation should be carried out into the complicated system which faces many home owners who find it difficult to replace a front door or to attend to other repairs that are necessary if they are to maintain their homes. As I said at the beginning, we welcome any money to improve housing but it must be real money and it must meet the need to maintain houses to a decent standard. I would support the Minister if he continued to press his colleagues in the Department for additional monies to provide for the improvement and repair of houses, but he should also consider the wider problems facing home owners now that they are being denied help from the maintenance schemes that used to be available.
Mr. Trippier: I may be able to give the hon. Member for Normanton (Mr. O'Brien) some comfort. He said that consideration should perhaps be given to making grants available for housing built after 1919. That will be a feature of our legislative proposals in the forthcoming local government and housing bill. The hon. Gentleman referred to the fact that we failed to publish statistics on the condition of housing, but went on to refer to the English house condition survey which we preferred as the mechanism for publishing the state of the stock of housing, particularly in local authorities but also in the private sector. Although I understand that he was bound to be selective in some of his quotations, perhaps I can give a number of others that put the matter into perspective. The results of that survey are encouraging. They show that overall, the condition of the stock has improved since the previous survey in 1981. Less that 3 per cent. of the stock lacks basic amenities compared with 5 per cent. in 1981. The proportion of the stock which is classified as unfit has been reduced from 6·3 per cent. to 5·6 per cent., and the proportion in serious disrepair has remained broadly the same—about 6 per cent.—and we are going to look at that. There has also been an improvement in the provision of other facilities. Homes are better heated and insulated than they were in 1981—nearly 75 per cent. of dwellings have central heating, compared with only 57 per cent. in 1981, 7 and 70 per cent. of the stock has loft insulation compared with 61 per cent. in 1981. That reflects substantial private sector investment in the stock between 1981 and 1986. The value of the work carried out by owner-occupiers was £12·1 billion in 1986 alone and that undertaken by private landlords and their tenants amounted to £1·1 billion. That was a real increase on more than 30 per cent. on the figure for 1981. Public sector spending on renovation has also increased substantially in the same period. Spending on improvement grants for private owners more than doubled in real terms between 1981 and 1986, and spending on the renovation of the local authority stock increased by almost 60 per cent. in real terms over the same period. We recognise that more needs to be done to tackle particular problems of property in poor condition identified in the report, and the proposed new system of grants for private owners will ensure that help goes to those whose property is in poor condition and who could not afford to carry out the necessary works without our assistance. When the hon. Gentleman and I debated those matters some months ago, we agreed that it was only fair and right that the available money should be targetted at people in real need. Provision for next year is 13 per cent. higher than the out-turn this year and will include extra money for renewal schemes in the worst housing areas. The hon. Gentleman mentioned accredited builders. In circular 16/88, which was sent to local authorities, we said: "A list of builders willing and able to carry out repair and improvement work to a good standard can be a helpful source of advice to householders." We do not want to give direction from the Government stating, "This must be mandatory." That would contravene the European directive, which has been widely discussed on the Floor of the House. The hon. Member for Normanton referred to the cowboy working party, which reported to me a few months ago. We have tried to respond positively to some of its suggestions. The Builders Employers Federation has met me at the Department of the Environment to discuss that matter. I made it clear that I am prepared to share a platform with the Federation to get across the importance of insurance or guaranteed insurance schemes. I am sympathetic to the hon. Gentleman's point, but we cannot make it mandatory. 8 The hon. Member for Normanton mentioned community programme schemes—they are now employment training schemes—and particularly the successful community refurbishment schemes which are more widely known as estate action schemes. We have substantially increased the resources in the White Paper on public expenditure for estate action over the coming three years. I have no doubt that we shall see a substantial increase in the number of those schemes, through CRS and the wide use of employment training. Our difficulty at the moment is that, because the construction industry is busier now than for the past 12 years, it is extremely difficult to match the skills vacancies advertised in many areas, which is another reason for having employment training. As there is a need to employ people for those vacancies, even if they are at a semi-skilled level, people will go straight into a job rather than going into a training scheme, so fewer people will be available to go on the CRS or estate action programmes. I have come across that problem in my constituency. We are anxious to complete the work of estate action schemes within a 24-month period and envisage not only the improvement of the property, but of the surrounding environment. I do not share the hon. Gentleman's concern. Employment training is taking over from the community programme. If it is not appropriate to use employment training, we are content to allow the private sector to bid for the work, under normal procedures, and with the local authorities working in partnership with us, that work should be completed in short order. I think that I have dealt with the hon. Gentleman's points, so I commend the order to the Committee.
Question put and agreed to.
Resolved, That the Committee has considered the draft Grants by Local Housing Authorities (Appropriate Percentage and Exchequer Contributions) Order 1989.
Committee rose at eight minutes to Eleven o'clock.
THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:
Mr. Michael Morris (Chairman)
Hayhoe, Sir Barney
Howarth, Mr. George
Shaw, Sir Giles