Housing (Old Properties)

– in the House of Commons at 12:00 am on 8th August 1966.

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7.6 a.m.

Photo of Mr Reginald Freeson Mr Reginald Freeson , Willesden East

To start on the subject of housing associations in relation to twilight or blighted areas in our cities it is necessary to state a few bald facts statistically, although I do not intend to weary the House with an extensive recital of such detail.

Of the 15 million households in this country it is estimated that over 2 million are over 100 years old and about 2½ million are between 65 and 100 years old. It is to the latter figure that we have to pay attention when discussing the question of ageing areas of cities. With the first figure we are concerned chiefly with the problem of slum clearance coming upon us progressively over a period of years. With the second figure of about 2½ million dwellings built between 65 and 100 years ago, we are concerned with sub-standard property which has not, in the main, come up to modern requirements.

It is estimated, I believe, that out of the 15 million households about 3 million either share or are entirely without a w.c., nearly 2 million share or are without a kitchen sink and over 1 million share or are without a cooking stove. I could go on to recite further figures of other amenity shortages—to put it mildly—in millions of homes.

I know from my experience in local government work that a considerable amount of activity is building up in local government to deal with this problem. In the main, it is still confined to the question of redevelopment of the worst twilight areas, but increasingly there are good examples of properties being purchased either individually or within districts for modernisation and improvement. But it remains a fact that no matter how extensive the work of local authorities is in those areas of the cities they are not able to cope with the urgency of the problem within the space of the next few years because they have not got the administrative resources and technical staff to handle the job of large-scale improvement and it is not likely that they will be able to build up their administrative organisations and recruitment of such staff within a reasonable time sufficiently to get ahead on a large scale with dealing with the problem of sub-standard properties.

That is the practical reason why I wish to raise the question of housing associations, but there is also a question of principle or basic policy involved here. I, as a good social democrat, believe that in extending the field of public ownership in a variety of directions in this country we should always be aiming, in the end, to diffuse that ownership so that it is not over-centralised where it is not necessary to centralise it, and I think that in the field of housing and community activity one can best find techniques for diffusing rather than centralising social ownership.

While it will be absolutely essential to extend considerably the ownership of rented properties by local authorities to deal with the problem of sub-standard properties, there must be scope both on practical grounds of principle and policy to extend the field of other forms of social ownership by way of various kinds of housing associations, whether charitable trusts, co-operatives or other forms of housing association which I will deal with in my remarks.

It is true to say that in this country the possibilities of housing associations in one form or another as a responsible means of social ownership has hardly been touched upon. When we look at the whole of our housing field and compare it with community activity in other countries in Europe and indeed in the United States, we see that the scope of housing associations and co-operative housing associations has been much wider and much more dramatically pursued and enlarged upon than it has been in Britain.

There is undoubtedly great scope for such associations in the twilight areas of our cities as an important supplement to local authority action. At present, there is far too little that is positive being undertaken by local authorities to sponsor housing associations generally, and sometimes there has been deliberate discouragement. I do not intend to describe the powers that lie with local authorities either to finance or to sponsor housing associations; this would be a wasteful exercise, as one can go and look at a reference book to establish what these powers are. What I am concerned about is the use of these powers imaginatively and positively, and I do not feel that this is the position at present though there are signs that more authorities have been interesting themselves recently than was the case in the past.

It remains true, however, that there is little positive action over the country as a whole, and, as I have said, some deliberate discouragement in particular instances. There have even been cases to my knowledge where offers of large convertible properties in twilight areas have been refused by the council for one reason or another, and some may be good, because of expense or managerial difficulty, and the same councils have afterwards refused to help by means of loans or grants the purchase of such properties and their conversion by housing associations through the rate cost would have been no higher than for council-built dwellings or the council purchase of such property.

In other cases councils have refused to consider buying expensive new blocks of flats on the market because the rents or rate subsidy was too high for their tenants, and have then refused also to buy on a limited subsidy basis for use by housing associations. The blocks have thus remained at luxury and speculative rents or prices on the market instead of being put to priority social need. The tendency even for those councils which are willing to provide loans to associations is to treat such negotiations almost as business matters between a mortgagor and a mortgagee.

The slowness of this procedure means that offers of properties are lost and that initial expenses of association members with limited resources are high. I have experience of advising housing associations which have lost property after property as a result of this approach by local authorities. It also means that even when transactions are completed, there is a long period of capital repayment and other expenditure and no income while works are carried out on a further loan when dealing with older properties. This, plus the high cost of property in the large conurbations, militates strongly against the expansion of associations in just those areas and for the very people who are most in need of them.

The result of this local government failure by default is that there are many large old houses on the market which could become homes at reasonable cost rents or with small subsidies, but which, instead, continue to be rack-rented and disgracefully maintained by private landlords. In some instances, also, instead of being helped, associations have been asked to contribute considerably to the capital cost of housing schemes to help the local authorities in question and the asosciation schemes have thus collapsed.

What is necessary, particularly in the central built-up areas, the twilight areas with which we are concerned this morning, is for councils to be willing, for example, to carry the cost of land so that associations are responsible for buildings, conversion and management costs only. Reasonable rents and subsidy would thus result, certainly at no higher level than on local authority dwellings, and in most instances at a considerably lower level of cost than would be the case if the councils concerned were themselves to purchase and convert or were to demolish and build anew.

The method would be, as I have suggested, for the local authority to buy the property and negotiate a long lease on the life of the building, when improved and converted, with a registered housing society operating an approved system of management on an individual or pooled cost rent basis according to circumstances and on the advice of the local authorities concerned. Indeed, there is no reason why local authorities should not require some of their officers to be seconded especially to advise and to help in the creation and running of housing associations and—I go further—even to investigate properties considered unsuit- able for direct housing use by the local authorities themselves. What we need is a positive policy by local authorities rather than a passive one.

Alternatively, a housing society could be provided with local authority or Government's Housing Corporation loan capital, unrelated to a specific purpose, sufficient to enable the societies concerned to act promptly when negotiating the purchase of properties and to put works in hand and cover the period when there is no rent income to match expenditure. This is of considerable importance, because one of the biggest problems facing housing associations, and a problem which has resulted in the total failure and collapse of worth-while efforts by people forming themselves into such associations, has been the long period of time when they have been seeking to buy properties, and have then had to initiate negotiations with the local authority for the necessary loans to carry through the purchase and have been involved in delay, sometimes necessary but often unnecessary, which has resulted in the properties going to another purchaser, often a rack-renting landlord interested in making the most out of the larger profits now coming to hand in the old parts of our cities.

It should be made much more widely known that the Government's Housing Corporation is empowered to lend money for the purchase and conversion of suitable old property by associations, and that it is not confined—I understand that this is the position—to making loans for the new housing schemes. It would be interesting to know whether there has yet been any example of a housing association receiving assistance from the Housing Corporation for the purchase and conversion of a large old property. I understand that so far the resources have been made available only for the building of new properties, which is not the best way to assist in meeting the greatest need in the older parts of our cities.

I state briefly, but not without thought, that there is an untapped field of sponsorship for housing associations within the trade union and Co-operative movements. The Ministry could well initiate discussions with some of the larger trade unions and the Co-operative movement with a view to encouraging such sponsorship. It is not unknown on the Continent, but as far as I know it is totally unknown in this country, for trade unions to associate themselves with this activity in housing. It should be encouraged, so far as the various constitutions of the unions would allow them to embark on this kind of activity.

It is important that the Milner Holland Committee's recommendations for easing the tax burden on housing associations should be implemented. There have been moves in the Finance Acts since the Committee reported, and the Report was debated in the House, but further measures are needed. It is also important for the Government and local authorities to want to help, instead of being mildly interested in some instances, indifferent in others and even antagonistic in some instances to the idea of housing associations. The problems arising in old districts in our cities is so great that every social agency—Government, council and housing association—should be brought to bear on them.

I know that the Ministry has recently been in fairly close contact with the committee of the London boroughs in an attempt to encourage interest there. I have seen most of the contents of the letter sent by the Minister to the committee, and I can certainly highly commend that letter, but I am concerned about what happens when the matter goes from the committee to the London boroughs—and this is just one part of the country. I fear that it will be noted at local authority level, no doubt in a friendly spirit, but that the authorities will sit back and await applications, as they do with people who apply for mortgages to buy their own homes.

What is wanted now is a positive assertion of the need for this by the local authorities on the lines I have suggested, for the local authorities to go out of their way in their districts to seek out those who would be interested in the housing associations, to seek out the properties and to get this kind of policy embarked upon, rather than waiting for the people to come to them with possible inquiries.

I am reinforced in my view that there is a need for a greater lead from the Ministry by the Answer—the second I have had on this subject—I received from the Minister to a Question which I put to him last week, asking whether he would publish a circular. My hon. Friend replied: Local authorities know that my right hon. Friend is anxious that they should do all they can to help and encourage housing associations, and he does not think further advice on the subject is called for at present."—[OFFICIAL REPORT, 2nd August, 1966; Vol. 733, c. 67.] I have thrown out one or two suggestions as to how local authorities might give a more positive lead, and I suggest that something along those lines might be incorporated in a circular of guidance and encouragement to local authorities to take things a bit further.

I am further supported in this view by the National Federation of Housing Societies, which, in its last annual report, expressed some disappointment at the failure, by and large, of local authorities to take a positive lead, although the Minister of Housing and Local Government, as it records, has asked the Federation as well as others to assist in the encouragement of the existing associations and the promotion of new ones.

In its report the Federation itself makes a specific reference to the need for this kind of work in the twilight areas of our cities and towns. It is vital that we embark upon greater activity within these areas. The local authorities should take a much more positive and vigorous line. The Federation might be brought into discussions with the Ministry and the local authorities to get the work going. We cannot afford to allow hundreds and thousands of large properties which one cannot expect to be pulled down in the next few years under slum clearance and redevelopment schemes to continue on the market being sold and resold by speculative rack-renting landlords to be let off in multi-occupation, without proper amenities, while, at the same time, people are in need of modern or modernised homes in our big cities.

If we continue to allow this to happen, because the local authorities are unable to deal with the whole range of work, no matter how much they extend their activity, we shall by default, to put it no more strongly, deliberately encourage the creation of more and more slumdom in our cities, and that at a time when we have a big enough job on our hands to clear the already classifiable slums.

Although I have had a reply so far that a circular is not called for, implying that more positive action is not thought to be necessary at present, I urge the Minister not just to have another look at the question, but to keep it constantly in mind so that there can be more positive efforts made to encourage the local authorities to take the lead and go out to encourage people to get associations going to take over the old properties and bring decent conditions to some of the shoddy houses which are still to be found on a large scale in the centres of our cities.

7.28 a.m.

Photo of Mr Robert Mellish Mr Robert Mellish , Bermondsey

My hon. Friend the Member for Willesden, East (Mr. Freeson) is one of the hon. Members who is most highly qualified to raise this subject. I know of no Member who has a greater knowledge of housing problems, particularly in London. He has had many years' experience in local government, and as a leader of a local authority, and it is right that this morning he should initiate a debate on a situation which many of us recognise could and should be improved, but which is being ignored. I am grateful to him for raising the matter.

It is a fact that renewal, whether by redevelopment or by rehabilitation and improvement, of the outworn parts of our towns and cities will undoubtedly be the big housing problem in the next 20 years, and I am sure that my hon. Friend would be the first to agree that I need no convincing about the important part which housing associations can play in this task.

Let me, first, put the problem in its context. As a Government, we saw our first task as being a rapid acceleration of the new house building programme. Only by this means can we overcome the backlog of shortages and provide for population growth. Only by this means can we get rid of the present slums that we know are so bad that there is nothing for it but to knock them down. Despite the economic difficulties which the country is now facing, we shall see an acceleration of this task. We shall do our best to ensure that those who are responsible for the removal of slums—and that can only be the public authorities—are encouraged to improve their programmes, and get rid of their slums quicker.

Having said that, let me remind my hon. Friend and the House that, early in 1965, we set in hand a whole series of studies designed to tell us more about the ways of dealing with houses that are obsolete but not slums by current standards. A sub-committee of our Central Housing Advisory Committee was given the task of reviewing the present standards of housing fitness. Its report, which has just been received, will be published in the autumn. I know that my hon. Friend will have a particular interest in it.

My Department's Urban Planning Directorate has made a detailed examination of one area of obsolescent homes in Rochdale to find out how best to decide between redevelopment and rehabilitation, and how improvement to the houses can be linked with improvements to the environment. I know that my hon. Friend will be the first to concede that that is also an important aspect of house improvement. We propose to publish that report very shortly.

My right hon. Friend is reviewing the whole of the improvement grant system to see how it can be made much more effective. To this end, we have commissioned a market research firm to make a survey. Another problem is how to ensure better and continuing maintenance of old houses. These various considerations must be brought together to mount a concerted attack on our obsolescent housing stock, and we see that as our next major task in the housing field.

However important the part which housing associations can play, they cannot be considered in isolation. My hon. Friend rightly pointed out that local authorities have an enormous part to play here, and so have owner-occupiers and private landlords. Many ideas and suggestions have been put forward for stimulating activity, and I am grateful to my hon. Friend for what he has said. I give him the assurance that this debate will be closely read not only by my right hon. Friend, but by those responsible in the Department for advising on policy. The debate will not be just a matter of going through the motions.

I am aware that in accelerating new building, with higher subsidies to local authorities and housing associations and assistance to the lower paid owner-occupiers, we may have tilted the balance in favour of redevelopment and away from rehabilitation and improvement. That is something which we must examine. A coherent and comprehensive policy for the older houses is called for, and I give my hon. Friend an assurance that housing associations will share in the benefits of that policy and will have a continuing rôle to play. Indeed, there is a worth-while job to be done here for which determined and efficient housing associations are particularly well suited.

In the areas of acute housing pressure, local authorities often feel that their strained resources can be most usefully deployed in large-scale operations whereas the improvement and conversion of old properties means inevitably dealing with individual houses or at best with small groups of two or three at a time, and it is a fact that some local authorities, particularly in London, are too busy with their immediate task of trying to clear the slums and the rest to find time to deal with some of the older property not immediately due for redevelopment. The housing associations can take on the sort of work of dealing with one, two or three houses. We hope that local authorities will welcome the contribution that they can make in shouldering some of the burden.

This is not a new idea. Many housing associations are already doing this sort of work, with first-class results. On the other hand, it is as well to bear in mind that there are others which have very little to show for a great deal of effort. It might be thought a little invidious to mention names, but I do not think that anyone can complain if I make a reference to the very fine work which has been done, for example, by the Kensington Housing Trust, the Nottinghill Housing Trust and the Mulberry Housing Trust, with which the right hon. Member for Leeds, North-East (Sir K. Joseph) has been associated. There are, of course, many others. Moreover, we can expect other housing associations and trusts to be formed to do this sort of work and we welcome them.

The British Council of Churches Housing Trust is, I know, doing its best to form new housing associations centred on local churches. I understand that the right hon. Member for Leeds, North-East and my hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) are taking a leading part in setting up a number of trusts in the London area which they have in mind to operate on the same lines as the Mulberry Trust.

I think that we ought not to discuss this issue without mentioning some of the snags which have been revealed by the experience of the past few years. Housing is a serious business. It demands hard work, determination, professional skill and money. Good intentions are not enough by themselves. It was put to me recently that, for a housing trust engaged in this sort of work to be effective, it needs four ingredients: first, a first-class housing manager; secondly, a competent chairman with drive; thirdly, some funds to meet overhead expenses for the initial period until rental income covers management costs, as well as some working capital; fourthly, financial support and the full co-operation of the local authorities. I entirely endorse this. A good housing manager is essential if an association is to do this work on any substantial scale and I am sure that this is one of the first requirements.

Perhaps I can say something about the question of co-operation by local authorities. My hon. Friend said, and I admit this, that some local authorities are not prepared to co-operate with housing associations. Or that, if they are, the amount of financial support they are prepared to give is not sufficient to enable schemes to be carried through to a successful conclusion. Or that there are long delays in dealing with applications which add greatly to the difficulties of the associations which, after all, are working where quick decisions are necessary.

I have no doubt that some of these criticisms are true and, to the extent that they are, I hope that local authorities will recognise the contribution that housing associations can make and will be prepared to be more forthcoming. But it is certainly not true in all cases. Some local authorities I know are only too anxious to give all the help they can to associations that come to them with sound, viable schemes, and in evidence of this I would point out that the amount of money which local authorities have advanced to housing associations has increased fourfold in the last four years.

There is another side to this question. Local authorities tell me that they have to waste a great deal of time "vetting" schemes which have not the slightest prospect of getting off the ground, or that they are criticised because they will not make advances for schemes that simply are not viable. They say that their officers have to spend so much time giving help and advice to associations who simply do not understand what they are doing that it would be more economical if the authorities did the job themselves.

I have no doubt that there is a great deal of truth in this. Advances are made by the local authority to housing associations, using public money and the authorities have not only a right but a duty to make sure that the money is spent wisely. The local authorities must be the judges of whether a scheme is viable, and I do not intend to criticise any authority which declines to authorise money for a scheme which it does not believe will stand up to critical examination. Housing associations, if they want local authority support, have to be able to show that their proposals deserve it. They must select the right areas for their operations. It is no use selecting property which is likely to be demolished by the local authority under a clearance scheme in five or 10 years, and asking for a 25-year loan to buy it. This is common, particularly in the London area.

The property must be structurally sound and suitable for improvementt and conversion. I would have thought that it should be property which can be expected to have a useful life of at least 30 years after improvement. The price must be right, because the price governs the rents and it is no use producing good dwellings at rents that ordinary people cannot afford. Some associations complain that there is a gap between the price which they have to pay for property and the amount which the local authority will advance. But I know of one trust which tells me that it is not interested in property which it cannot acquire at the local authority's valuation. Nevertheless, it says that it has not the slightest difficulty in buying all that it can handle.

It is important that a housing association interested in this sort of work should establish a working relationship with a local authority. My view is that it is probably better for an association to confine its operations to one area, and it would be wise to accept any advice that the local authority can give on where and how it can do the most useful work.

I hope that I have said enough to show that we as a Government are anxious that the housing association movement shall be given every encouragement to play its part in securing an improvement in the decaying areas of our big cities. I have mentioned some of the difficulties that have arisen in the past, and I hope that nothing that I have said will be taken as a discouragement of work of this nature. It is important that local authorities should give their support to it, and it is equally important that the housing associations should set about the task in a way which will justify the support which they need.

In opening his speech my hon. Friend reminded us of the vast numbers of properties which were in a decaying condition, without baths and without adequate facilities. There can be no doubt that although their contribution is small the part of the housing associations in this work is extremely important. I can give an assurance to my hon. Friend and to the House, that my Minister and my Department will do all that they possibly can to encourage local authorities to lend money to those associations which justify that aid, to encourage them to go forward and to make an improved contribution to this great problem, with which we are all concerned.