Sir George speaks out on Housing
27 Nov 2007
Speaking on the Second Reading of the Housing and Regeneration Bill, Sir George outlined ways in which it could be improved. See below:

Sir George Young (North-West Hampshire) (Con): It is a pleasure to follow the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who has forgotten more about housing than most of us ever knew. I am only sorry that there is not room in the new Brown Administration for his talent. As for the Front-Benchers’ speeches, I thought that my hon. Friend the Member for Welwyn Hatfield (Grant Shapps) made a robust speech, and I found the Minister for Housing’s speech much more partisan than the one that the right hon. Member for Greenwich and Woolwich would have made if he had been introducing the Bill.

I begin by mentioning clause 267—a clause that no one else has mentioned, but that represents a triumph by Housing Ministers over the Treasury. As the House will know, many local authority tenants have voted to transfer from a local authority to a housing association in exchange for guarantees on rents and commitments to investment in their homes. For theological reasons, the Treasury has insisted on rationing the number of transfers each year, and as a result a number of tenants have had to wait for the improvements, and the local authority has had to wait for the receipt of capital that it would have reinvested in new social housing.

Clause 267 prises the clunking fist of the Treasury away from this process and, we hope, brings an end to the rationing of large-scale voluntary transfers. My welcome for that clause at the end of the Bill is balanced by an unforgivable omission in chapter 4, which deals with the functions of the new Homes and Communities Agency. One of the aims of the Bill, which I applaud, is to empower tenants and give them more choice, but there is nothing in the Bill that requires the landlords of social housing to work together to enable tenants to move from one landlord to another.

Unlike owner-occupiers or private sector tenants, who can up sticks and move, social housing tenants are not in control of their destiny. The stock distribution of their landlord is often based on local authority boundaries, and if they want to transfer it can take a long time so to do. The popular and successful national mobility scheme, which was inherited by the Government in 1997, collapsed earlier this year owing to mismanagement. There is now no way that a tenant in, say, Andover can move to another constituency except through laborious methods such as those which existed when I first became an MP 33 years ago, with a tattered reciprocal exchange book and the individual negotiating skills of housing officers.

I had a debate on this fiasco earlier in the year. It remains my strong view that there should be in the Bill a statutory basis for a national mobility scheme, and I hope the Bill will be amended in Committee in order to secure that. Without it, the promise of empowerment and choice for social tenants rings rather hollow.

Margaret Moran (Luton, South) (Lab): The right hon. Gentleman and I both spent time on the homes board in previous years. I agree with his point. Does he further agree that for the Bill’s objective of increasing social and economic mobility and opportunities for social tenants, the statutory homes-type organisation will be critical so that tenants can move where employment is available?

Sir George Young: What I want is a provision in the Bill which obliges somebody to run a national mobility scheme. I hope that if an amendment along those lines is tabled and if the hon. Lady is on the Committee, it might have her support.

The main thrust of the Bill is basically to split the Housing Corporation into two, and adds extra functions to each half. On to the investment half is tacked English Partnerships, and on to the regulatory half is tacked Oftenant, which will eventually cover all social tenants. The social housing landscape will change significantly when the Bill goes through. It is worth pausing to reflect that the most successful private finance initiative that the country has ever seen has been the Housing Corporation. Some £35 billion has been invested in social housing, with not one default. If one compares that with private finance initiatives in health, transport or defence, one can see that it is a fantastic record. One could argue that instead of abolishing the Housing Corporation, the Government should be cloning it.

It is vital—I pick up a point that the right hon. Member for Greenwich and Woolwich made—that, in the new landscape, we continue to generate substantial private capital to invest in social housing, and nothing in the Bill should prejudice that aim. In particular, the new regulator must not cause housing associations to be reclassified as public sector bodies. I remember the so-called Ryrie rules, which meant that the private funds raised by housing associations scored as public expenditure, wholly negating the advantage of borrowing from the City. We must not return to those days, and we need to address the concern of the National Housing Federation that the regulator might inadvertently so reclassify. That would be a shot not so much in the foot but much higher up.

On the case for the abolition or splitting of the Housing Corporation, which was set up some 40 years ago, there has been a rather academic debate as to whether the dual responsibilities of the corporation—regulation on the one hand, and investment on the other—complemented or compromised each other. I tended to be in the complementary camp, for the reason that I have just mentioned. There was an implicit reassurance for investors that regulation of housing associations would have an eye on the lenders, as well as on the tenants. Having both functions under one roof meant that money was not lent to housing associations, for example, where there were doubts about corporate management, and there was a one-stop shop for housing associations.

I hope that under the new regime we are not heading for a Northern Rock-type scenario by spreading responsibility for housing associations over more than one institution, with the new HCA being a sort of Bank of England in control of the money supply, and the new Oftenant being in control of regulation, with a possibility of confusion and regulatory failure.

As the Minister said when she introduced the Bill, the HCA is about supply, and there has been much emphasis on the need for 3 million new homes. Supply should, of course, be increased, and we all want to see faster help for those in housing need. However, I must make a basic point: the quickest and cheapest way to help those on the waiting list is to create vacancies for them in the existing housing stock. For those on the waiting list, the statistic that matters is not the number of new social houses built, but the number of re-lets in the existing housing stock. We should be doing far more to accelerate the number of re-lets by helping those whose circumstances have improved to do what many of them want to do, namely become home owners. The part of the Housing Corporation budget that promotes mobility has been squeezed, and I hope that the HCA will revisit that balance. In turn, that would help to encourage demand at the lower end of the housing market and give confidence to house builders. If we are to hit the ambitious target, we must look to the private sector as much as possible to build the new homes rather than the public sector.

Andrew Stunell (Hazel Grove) (LD): The right hon. Gentleman has rightly pointed to the need to increase mobility, but surely someone who can buy and therefore leave a council house is most likely to buy that council house. How does he propose to prevent that mechanism coming into play, which would result in not more council housing but less?

Sir George Young: In the scenario that the hon. Gentleman has described, there would be a capital receipt, which could be reinvested in new housing stock in order to help the person on the waiting list, so one would achieve the same goal by a different route.

Mr. Love: One of the most interesting findings in the Hills report is that the number of re-lets in the public sector is decreasing rapidly and that the only way to address that particular problem is to build new supply.

Sir George Young: I agree that if one is going to incentivise existing tenants to move out, it should be accompanied by measures to increase supply in the private sector, otherwise one will simply drive up house prices. If one were to do the first, one would need to do the second in order to avoid house price inflation.

On a related question about the balance of the budget, there is nothing in the Bill about private sector renewal, because the funds come from elsewhere. However, the emphasis on affordable housing, which has been brought forward from the Green Paper, has pre-empted a huge chunk of the overall housing budget. If, for example, one examines the small print of the comprehensive spending review 2007—the public service agreement 2007, as was—one sees that the target for decent homes has been deleted. The improvement of social rented homes to decent standards is now one of 198 optional indicators in local authority agreements. There are now no indicators relating to the improvement of private stock or to the specific delivery of adaptations. The housing pot will be under enormous pressure to deliver the targets for new affordable homes, and the initial indications are that there will be substantial reductions in other parts of the housing budget and particularly those parts of it that go to private sector renewal.

I am the chairman of a small national charity, the Foundations Independent Living Trust, which helps elderly or disabled people on low incomes to stay in their homes, or to return to their homes after they have been in hospital, by working through home improvement agencies. More and more older people are home owners and want to live with dignity in their own homes for as long as possible. Home improvement agencies face enormous pressure on improvement grants, and there is a real risk that by putting so many eggs in the new build social housing basket, the Government will pay a price elsewhere on the housing front.

My main concern about the Bill is the balance between the HCA on the one hand and local authorities and housing associations on the other so far as delivery is concerned. I believe in devolving down, so the job of building houses or communities is for local government or housing associations—it is not a job for a new national quango. The Housing Corporation did
not build homes directly. If one examines the powers being given to the HCA and the language used by Ministers, it appears that the HCA will displace existing delivery agents and centralise decisions that are currently taken locally. The Chartered Institute of Housing got it right when it said that it saw the HCA as “providing flexible tailored support”. The HCA should be an enabler—a sort of godfather. The notes on the Bill tell us that it will be able to establish new communities or work to regenerate or develop existing communities, buy land and provide employment and training opportunities. It even has powers to preserve trees, deal with antisocial behaviour and own houses. That poses the question: why are housing associations or local authorities not performing those functions? The Bill sits rather uneasily with what is stated in “Homes for the Future”:

“We want to see local authorities step up to play a stronger role in addressing the housing needs of all residents. We want to see them develop their strategic housing role by using the full range of housing and land use planning powers”.

Yet clauses 13 to 17 take those powers from local authorities and give them to someone else. If a new town is going to be built, then of course a new town corporation needs those powers, but rebuilding existing communities should be done by democratically elected and accountable local authorities working in partnership with housing associations that have their roots in those communities.

On Oftenant, I hope that we will get light-touch regulation leaving housing associations to get on with the job, not go back to the old days of prescriptive regulation and interference. The Bill suggests that the regulator’s functions go way beyond those relating to housing and intrude into other areas. Environmental and social and economic well-being functions also come under the regulator, whereas if they were carried out by anybody else, they would not. There is a risk of regulatory creep.

Clause 173 gives the regulator powers on rents. We need to think through how his powers on housing association rents will impact on local authority rents, because there is still a gap in many parts of the country.

On clause 54, I am surprised that we are still running down the new towns. I thought that I wound up the last of the new towns in the 1980s. It was argued then that we could not dump all the land in Milton Keynes on to the market. Yet here we are, 20 years later, still making provision for what the Commission for the New Towns owns.

I welcome the provision regarding members of the armed forces, who tend to miss out when it comes to the allocation of housing. Does the relevant clause cover wives in circumstances where the marriage breaks up and the husband leaves the Army, leaving the wife and family behind in married quarters?

There will be upheaval and turbulence, and there will be a cost, which risks diverting attention. I want a regime that decentralises, resources and empowers those in the front line, and guides and helps in delivering the new homes that the country needs; I do not want over-regulation, duplication or centralisation. The Government will have to be very careful if they are to get that balance right.

 
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