In the first year of office of the Labour Government of 1974 to 1975, public expenditure on housing, at 1979 prices, was just over £7 billion. In the current financial year, that has been reduced to £4·7 billion. By 1983–84, public expenditure on housing will have been slashed to £2.8 billion.
It is little wonder, then, that the Association of Metropolitan Authorities recently wrote a letter stating:
Housing has been cancelled for the next three years.
Those global figures do not make much impact on most folk until they are translated into what is happening at the grass roots level in towns and cities. I shall, therefore, refer to the position of Sheffield. The housing investment programme covers not only council house building but also slum clearance, council house modernisation, improvement grants, home insulation grants, mortgages, general improvement areas, housing action areas, acquisition of land, professional fees and many smaller, technical matters that must be met from the local allocation.
The allocation for Sheffield in 1980–81 is £21,185,000. Last year, the city spent £24·5 million. Allowing for inflation, that is equivalent in 1980 to about £28 million. In real terms, there has been a cut of 25 per cent. in the HIP. As Sheffield is a dynamic and go-ahead housing authority, it asked for £44 million. It has, therefore, suffered a cut of 50 per cent. If the figure of £24·5 million is adjusted for a rate of inflation of about 21 per cent.—it may be higher than that later in the year—it represents a cut of 25 per cent. That is serious.
What is the effect of those cuts on the building programme? I shall consider what Sheffield hopes to do this year and what it will be able to do on its reduced allocation. Virtually all the money will be swallowed up by existing commitments. There are a fair number of houses under construction and in the pipeline. Those houses have to be financed. Sheffield had hoped to start nearly 900 new homes in 1981. This has had to be cut to 100 because only £533,000 is available for new stocks.
Of course, that will have a considerable impact on the housing problems of Sheffield. It will delay tackling the formidable difficulty of providing specially designed new flats, homes and sheltered accommodation for the elderly. The problem of housing the elderly is growing in Sheffield as it is in the country generally. Incidentally, this has a "knock on" effect, because it is not possible to move elderly folk from the unsuitable housing that they now occupy and provide them with specially designed flats. The pressure is then put on the geriatric services and the geriatric wards of hospitals, and this is an extremely expensive way of caring for the elderly. The pressure on public funds may be more than it would have been had there been a reasonable allocation for new buildings in the first place.
There are also the consequences for employment. The Sheffield housing chairman has quoted figures of between 1,000 and 2,000 people who have been made unemployed as a consequence of the reduction in the housing programme. By no means all these are local authority employed. Private contractors are given a fair opportunity to take part in the housing programme in Sheffield, and about 350 workers in various categories and grades could be without work as a result of the ferocious reductions in the new building programme in the current financial year.
Then there is the problem of modernisation. Sheffield has an excellent record of council house building and there are many magnificent estates. In my constituency, the Gleadless Valley estate is widely acclaimed as the finest in Europe. Estates built in the late 1920s and early 1930s are now 50 years old, and even the post-war estates are 25 to 30 years old. At the time they were built, they were clearly outstanding and of much higher quality than the slums and derelict properties that they replaced. But naturally, as a result of the passage of time, they have fallen behind what people expect in the last two decades of the twentieth century.
Thus, a programme of modernisation is necessary and desirable, and Sheffield has set a target of 2,000 homes a year for modernisation. However, owing to the cuts in the housing investment programme in the current year, a programme to modernise 1,200 pre-war homes has been cut to 800 and a programme for 400 post-war houses has been abandoned altogether. Therefore, 800 families who might reasonably have expected their homes to be modernised this year will be disappointed. If national figures go the way that the public expenditure White Paper has indicated, that disappointment may extend over many years.
The problem does not apply only to the public sector. In Sheffield there are about 53,000 pre-1919 houses. These need improving and modernising even more than some of the older council estates. Of the current allocation, £1,250,000 will be taken up by improvement grants that are already firmly promised, which leaves very little money for new commitments to improvement grants for residents in privately rented houses. It was hoped that there would be 1,000 new improvements during the current financial year. That number will now have to be drastically cut back. Like the council tenants who have been hoping to have their dwellings modernised, many families in privately rented older houses, some dating back to before the First World War, will be disappointed. As the housing programme is progressively cut year after year by the Government, that disappointment will extend further into the uncertain future.
The same problem arises with regard to mortgages and loans for improvements. Sheffield has been giving about 15 mortgages a week over the past year or so and hoped to increase that figure to 20 a week. People who would have otherwise not had the opportunity would thereby have been able to own their own homes. I believed that home ownership was a key feature of this Government's housing programme. However, the chairman of the housing committee estimates that loans will drop to only one a week under the housing investment programme.
Perhaps the most astonishing feature of the allocation is with regard to energy saving. The Government announced not long ago that the scheme of insulation would be extended to public sector housing. Insulation saves the home owner or occupier money and saves the nation fuel. Having announced their generosity, the Government then cut the money available to Sheffield—and doubtless other authorities have suffered similarly—from £300,000 to £145,000 in the current year, which is a reduction of over 50 per cent.
Sheffield had ambitious schemes for energy conservation and planned to spend about £600,000 in the current year on that aspect of housing policy. It is now likely to have a miserable £20,000 for that programme. It had planned loft insulation schemes for 2,800 houses and other schemes for electrically heated maisonette and high tower blocks. Those schemes have more or less to be abandoned because the financial resources will not be available.
The Government have taken deliberate action to force up the price of gas and electricity way beyond what is required to cover the revenue accounts of those nationalised industries. They have a deliberate policy of recouping from these public corporations large sums of money that will go to the Treasury. It could be argued that that is one way of urging the need for conservation. However, those on low incomes, and particularly old people, are put under enormous pressure because of fuel bills. The Government then, through cuts in authorised expenditure on housing, force authorities such as Sheffield drastically to reduce or abandon ambitious, far-reaching and sensible plans for insulation to cope with the special problems of all-electric blocks built 10, 15 or 20 years ago—long before the oil crisis.
By any standards, this is sheer economic lunacy. This is a severe cutback in what Sheffield hoped for and asked for in its housing programme. Even if the Minister says that Sheffield's claim for £44 million was beyond what was reasonable, we are still faced with the fact that, whereas last year Sheffield expended £24½ million—about £28 million at current prices—that amount is being cut by one-quarter. The severe cutback in new housing puts jobs at risk and postpones the day when many people can expect a decent, suitable home. There will be long waiting lists and more people will be dumped in the geriatric wards of hospitals.
The cut in modernisation and improvement will reduce the council's ability to deal with the substantial problems of modernisation and disrepair. The cut in mortgage funds will affect those at the lower end of the housing market.
I conclude with a plea to the Minister. It may be that other authorities in the country, not as ambitious, vigorous and dynamic as Sheffield in housing, will find that their housing investment programmes are more than they require, by perhaps £1 million here or there. If that is so, I hope that it will be possible, within the fixed total of housing expenditure, for a reallocation of that money to be made to deal with some of the problems of modernisation, energy conservation and new building which now face Sheffield as a result of financial constraints.