London Borough of Newham (Resources)

Petition – in the House of Commons at 2:29 pm on 11th March 1988.

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Motion made, and Question proposed, That this House do now adjourn—[Mr. Alan Howarth]

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East 2:30 pm, 11th March 1988

What I and my hon. Friend the Member for Newham, South (Mr. Spearing) ask for is a fair deal for Newham from national resources. I emphasise fair, for my case is not special pleading or asking for special treatment for Newham. The truth is that Newham gets a raw deal, an unfair deal, from Government distribution of rate support grant and capital allocations. I shall demonstrate this. The bias against Newham is blatant and striking. So much so that to an impartial outsider it must look like discrimination — almost a vendetta against the borough. If the Government are acquitted of malice, it must he mismanagement or incompetence. Whatever the cause it should, in the name of equity, be rectified.

Under the old system of the urban programme, up until last year, there were eight partnerships selected for extra help, 23 programme authorities, and 16 other designated districts for a lower level of assistance. Newham was denied partnership status, even though the borough, on Government figures, suffered a higher level of deprivation than seven of the eight partnership authorities. How does one explain or justify that?

The partnership authorities in London received an extra £10 million per annum. So, over eight years, Newham was unjustly deprived of £80 million. That is a scandal.

Newham was also denied programme authority status, even though it was more deprived than all the 23 authorities which were granted it. How can we explain that? In London, programme authorities, such as Tory Wandsworth, which the Minister will know, received some £4 million to £5 million per annum extra, but Newham, as another designated district, was granted only about £500,000 a year. Where was the equity in that? When, previously, I made the case to the former Under-Secretary, the hon. member for Ealing Acton (Sir G. Young) he did not seek to justify the injustice. He agreed that I had made a valid case but, rather shamefacedly, said that the Government were unwilling to put more money into the urban programme to rectify the injustice. Next week's Budget will show that that money is available now.

In 1987–88, changes were made in the urban programme and all ODD authorities, including Newham, became programme authorities. Initial urban programme allocations for the coming year were announced on 9 February. Newham is to receive an extra £500,000, making £2·75 million. This slight improvement is welcome as far as it goes, but it is nowhere near enough. The announcement came in a written reply to the hon. Member for Kensington (Sir B. Rhys Williams), Why him? Possibly because "deprived" Kensington got an extra £600,000, compared to Newham's £500,000.

Even with this modest increase, Newham's £2·75 million compares, for example, with £11·75 million for Lambeth, £9·65 million for Islington, £4·5 million for Wandsworth — and so it goes on. All those are authorities less deprived than Newham, yet they are getting more money. Perhaps someone will explain. However, what I have mentioned so far is not the half of it. We have to consider the assaults on Newham's capital allocations, including its housing investment programme. In 1979–80, at September 1987 prices, the capital allocation for housing was £47,370,000. It was then continually slashed until in 1988–89, it is just over £17,026,000. In other words, it was cut by almost two thirds. The cumulative loss of HIP allocations over the nine years from 1979–80 has been a colossal £203,958,000. Is it any wonder that this has induced a horrendous housing crisis in the borough? By comparison, the cost of building a new home for each of the 572 families in bed and breakfast accommodation would be under £30 million. To this must be added the cumulative loss over the same period at 1987 prices, of £14,911,000 in education, nearly £13 million in social services, and more than £6 million in other services. Altogether, Newham has lost £237 million in capital allocation under the present Government, as well as being denied the £80 million that it should have received from partnership. It is impossible to bleed these enormous sums out of the borough without debilitating and damaging it, and that is why I am spotlighting its plight today.

A further cause of discrimination against the borough is the unfair basis of the Department of the Environment's grant-related expenditure assessment, which underestimates service needs in Newham in three ways. First, although it is difficult to imagine a borough more inner city than Newham, the Department persists in classifying it as outer London. As a result, the council loses GRE of more than £7 million. In theory that is partially offset by the borough's not having to pay inner London weighting to some staff, but in practice paying less makes it difficult to attract staff of the right calibre. The resulting shortage of qualified staff in some services is so acute that the only way to fill the posts is to adjust salary scales upwards. Therefore the council loses twice. The extra costs have to be paid, but there is no compensating rise in block grant. Secondly, the GRE does not adequately reflect the council's need to plan services for the growing population of very young and school-age children resulting from the borough's high birth rate. In addition, the equivalent of a new town is being built in the docklands area. The GRE assessment takes account only of these developments after the growth — including growth in population — has occurred. However, the council has to organise its services——social, educational and environmental—to meet the needs of the developments now, not in a few years' time.

Thirdly, and very important, the GRE makes no allowance for homelessness. This is putting Newham on the rack. Because of the cut in the HIP allocation which stops building, and the sales of council houses which reduces relets — that is as a direct result of the Government's policy—the numbers of homeless people are rocketing faster in Newham than in any other London borough, at a huge cost to the council. There is a statutory obligation to house homeless families. The costs involved are probably the least controllable part of the council's budget, because the council cannot control the numbers presenting themselves as homeless. Yet the Government provide no extra grant to cope with the crisis. The actual costs of homelessness to Newham since 1983–84 have been as follows: in 1983–84, £52,000; in 1984–85, £138,000; in 1985–86, £605,000; in 1986–87, £1,900,000; and in 1987–88, £5,400,000. Those prodigious sums reflect the increasing demand for accommodation and the increasing prices charged by hotels. Although the Government caused the crisis, they do not pay a penny towards it through grant.

It is estimated that in 1988–89, homelessness costs will approach £8 million. All this week councillors agonised and wrestled with the problem of closing a budget gap of that size. To maintain a relatively low rate increase, they had to make painful decisions to close libraries, old people's day centres and youth centres—basically to pay for the cost of homelessness. By the end of this year we shall have paid out £16 million on homelessness, yet have nothing to show for it.

After the general election Ministers started to talk of the need to do something about the inner cities. They suddenly seemed to have realised there was a crisis. One wondered what they had been doing for their previous eight years in office. What are they going to do? Is there a policy? If so, nobody knows what it is. We had been expecting a White Paper, but all we had was a vacuous press conference last Monday, which announced nothing new. Certainly so far it has been a cashless crusade. There has been no new money; on the contrary, for the previous eight years money was drained out of the inner cities. One thing is sure. Any policy initiatives can succeed only if they work with the local people and their elected local authorities, rather than seeking to bypass, usurp, and undermine them. Those elected councillors in Newham are a responsible group of men and women of integrity, dedicated to doing an honest job for their area and its people, as any Minister who has visited them will testify.

When the Audit Commission investigated London local government last year it had no criticism of Newham. The council has indulged in no extravance and no excesses of creative accounting to spend "funny money". In the run-up to the last election certain newspapers set up and staffed special desks to collect damaging stories about Labour councils, but they could discover nothing derogatory about Newham. Newham comprises about half of London's traditional east end; its position is pivotal. It will he impossible to regenerate London's inner city without regenerating Newham and tackling its problems. Those problems, not of its making, are of a severity found in few other parts of the country, and can be approached only by a combination of local and central Government actions, and that is what I ask for.

In reminding the House of the profile of the borough, I do not want it to sound like an unremitting tale of woe. The area has many strengths—first and foremost the people, who have many qualities including resilience. Newham is well placed to make the necessary changes. What it needs is the essential pump-priming expenditure to kick-start its regeneration. Special Government money and assistance has been given to the London Docklands development corporation to spend in docklands, but the worst urban problems in Newham are found outside that area. Only 6 per cent. of the borough's population live in docklands, and there is an urgent need for resources for the 94 per cent. who live in other parts of the borough. At the moment, according to the Department of the Environment's analysis, Newham is the second most deprived of all the 365 local authorities in England and Wales. Moreover, its problems have worsened drastically since the 1981 census. Unemployment is now 50 per cent. higher and homelessness has more then doubled.

Much of Newham was built in the latter part of the 19th century as cheap homes were provided for workers employed in the docks and in rapidly developing industries. That Victorian urban expansion has left us with an inheritance of environmental and physical problems. Much of this cramped housing, built a century or more ago, is badly in need of repair. The post-war rebuilding of Newham has added problems of high density high-rise estates. We have 112 tower blocks, some of them of the Ronan Point type, nine of which have had to be evacuated because they are unsafe. That is why the borough has voids—it is not a question of mismanagement. Unless extra resources are spent on maintaining the housing stock in the borough it will decay further and the housing crisis will continue to worsen. In whose interest can that be? Currently Newham has more than 46,923 unsatisfactory dwellings, 8,146 households without a bath and 5,290 households lacking an inside toilet. Each of those figures is the highest for any borough in London. It gives me no pleasure to report that the condition of Newham's housing is the worst in London. Most of that dereliction is in the private sector, in houses built before the first world war. Without resources it will deteriorate further, and the downward spiral of inner city decay, from which Newham desperately wants to escape, will continue.

Let us look briefly at education. Many of the schools were built before the first world war. The Department of Education's analysis shows that Newham has the highest level of educational need of all 96 education authorities in England and Wales, but that its expenditure per pupil is lower than that of similar education authorities. In 1987–88 Newham spent £27 per head in its primary schools compared with an average of £32 for outer London boroughs. In secondary schools, Newham spent £54 compared with an average of £68. We know that educational attainment is largely determined by social background. It is not surprising, therefore, that Newham has the lowest proportion of pupils achieving five or more O-levels/CSEs and that only two other education authorities in the whole country send fewer pupils on to higher education.

Despite this, in the past two years Newham has been forced to reduce the capitation grant by 10 per cent. In 1987–88 it cut its low level of expnditure on education by 5 per cent. or £4,183,000, lost 122 teachers, and cut back on school repairs and maintenance. This week it was forced to shut centres for the unemployed, cut back on educational equipment and furniture, reduce grants to voluntary groups, increase the price of school meals, reduce the budget of the careers service, charge for the teaching of mother tongue languages, and much more of the same. What other advanced country in the world would allow that to happen?

Newham's economy has taken a battering. From industrial restructuring and the early years of Government monetarism, the decade to 1981 saw a reduction of 25,000 jobs in dock work, manufacturing and transport. The closure of the docks and their related industry has had a devastating effect on the borough.

In October 1987, 14,638 people were registered unemployed, nearly one in five males being jobless. The damage that this does, the financial problems that it causes, the family break-up, the health and psychological problems, cannot be overestimated. Forty-three per cent. have been unemployed for more than a year, more than 26 per cent. for more than two years. Many of those in work earn low pay. Of Newham's women who have jobs, only 42 per cent. work full time. Many combine work with child care. Their low earnings are a cause of poverty, particularly among single parent families or where the woman is the only member of the household with a job. The prevalence of low paid, low skilled work and large scale unemployment has brought a rising tide of poverty locally. Financial hardship is squeezing more and more families into multiple debt and dependence on benefit. Currently more than 32,000 people claim benefit in Newham.

New jobs will be created in docklands, but, because of a skills mismatch there is a danger that many of these could go to outsiders and the development pass local people by. I am activating myself now to see that all those concerned — the LDDC, the developers, the incoming firms, Manpower Services Commission, the industrial training boards and others — agree to specific target numbers of jobs for local people and to ensure that the appropriate training and education is available and that the mechanism is put in place to see that local people get a fair share of the jobs.

Newham's people belong to many races and cultures. About a third come from ethnic minorities, and in some wards the figure is more than 50 per cent. Often they suffer twice, enduring the problems of others plus racial discrimination, resulting in high unemployment among ethnic minority youth. The languages of Urdu, Punjabi, Gujerati, Bengali, Hindi, Tamil and Malayalam are in common use. Many groups have their own specific needs, and the diversity of population means that Newham's community as a whole has a much greater range of needs, aspirations and outlooks, so the task of fulfilling those is more complex and expensive than in other localities. Central Government should make greater financial recognition of that.

As might be imagined, Newham social services carry a heavier burden than many other areas. Yet, despite that, Newham has the lowest expenditure per capita on social services of all comparable authorities. Is that not astonishing? It has the worst problems and the least money. It actually spends 16 per cent. less than its grant-related expenditure. In terms of social need, Newham can be compared only with the 13 inner -London authorities, plus Brent and Haringey. Of those, Newham is the second most deprived. Hackney having the unenviable distinction of being first. On social services expenditure per capita we are 16th — bottom; on social and community worker staff employed per 1,000 of the population we are again 16th—bottom; on the provision of day nursery places per 1,000 for the under-fives we are again 16th—bottom; on the provision of meals-on-wheels we are again 16th—bottom; on telephones for the elderly, we are also bottom. Any further reduction in provision can be regarded only with horror. The hard-working social services staff in the borough are so over-stretched that it is amazing we have not had one of those disasters that hit the headlines.

To sum up, the general picture is of an area which, historically, has served London and the country well in both war and peace, but which has been hit hard by industrial and social changes. It is beset by multiple problems, not of its own making, yet still has many strengths and much potential — the classic inner-city syndrome. What is to be done? The situation is getting worse, not better. Sometimes I am tempted to despair, but then I remember this time last year, when parliamentary debate and ministerial visits resulted in an increase of £7 million in the absurd expenditure limit for Newham that was then being proposed by the Government. So, by campaigning constructively, we were able to soften the blow and lessen the cuts last year.

Are the Government serious about wanting to improve the lot of the inner cities? If so, they cannot ignore so strategically important an area as Newham. They must approach it in partnership, in every sense of that word. If they do, they will find an elected council with no ideological block against co-operating pragmatically with central Government in improving the environment, the economy and the prospects of the local community. I propose that the Government send a senior Minister, either the Secretary of State for the Environment, or his right hon. and learned Friend the Chancellor of the Duchy of Lancaster, to spend at least a day meeting the civic leadership and the council's officials in Newham. They can look at the books, put all the cards on the table and work out a mutually agreed, fair deal for Newham, not a continuation of the present malaise, which is only storing up problems for the future.

I put that forward in a constructive spirit and hope for a constructive reply.

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment) 2:48 pm, 11th March 1988

In the time available I shall be delighted to put the Government's case again on the issues and problems in Newham. Last July I replied to a debate introduced by the hon. Member for Newham, North-West (Mr. Banks), whom I am pleased to see present.

I would first like to deal with housing. Recognising the case made by the London borough of Newham at the housing investment programme meeting in September 1987 and in the borough's HIP strategy and programme, the Government are increasing the borough's initial HIP allocation from £17·5 million in 1987–88 to over £18 million in 1988–89. It was one of eight boroughs which received an increase in their HIP allocation to reflect their particular problems.

Further HIP support is available through the Government's estate action programme to help underpin measures to improve the management and quality of life on difficult-to-let estates. Newham has taken full advantage of such funds and recognises the importance of supplementing these with private-sector funding where possible, for example at Woodlands estate. If current bids are approved, the total additional HIP support through the estate action programme could increase from £1·9 million in 1987–88 to nearly £3·3 million in 1988–89.

In the current financial year, Newham's HIP allocation has been increased by a further £1·2 million to bring back into use empty dwellings for homeless families. This is reducing the number currently being placed in bed-and-breakfast accommodation on the one hand and reducing the number of the borough's empty properties on the other. Newham has the highest percentage of empty local authority dwellings—some 9 per cent.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Will the Minister be careful not to mislead the House? That figure comes from nine tower blocks, which have had to be decanted. If we eliminate those, the number of voids in Newham is lower than that in Wandsworth.

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

I can accept the hon. Gentleman's first point that there are some 900 empty units in eight Taylor Woodrow-Anglian tower blocks, the Ronan Point-type, which the borough has decanted for safety reasons. Nevertheless there is ample scope for improvement in the number of voids.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

If the empty tower blocks are discounted, there are fewer voids.

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

The hon. Gentleman suggests that if the empty tower blocks are discounted, Wandsworth has more voids as a percentage than Newham. He is wrong. If we discount the 880 units, which I am prepared to do, 6 per cent. of the borough's stock is empty compared with only 2·8 per cent. in Wandsworth. Even discounting the empty tower blocks, if the present voids were used to house the homeless, it would not be necessary for Newham to have anybody in bed-and-breakfast accommodation.

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

The hon. Gentleman says "Give us the money." As he has already accepted, having people in bed-and-breakfast accommodation costs the borough a great deal of money. Most responsible councils are finding scope for using their empty stock to reduce the need to rely on bed-and-breakfast accommodation for housing homeless people.

The borough has ample scope to improve its efficiency. At 1 April 1987 its rent arrears stood at over £3 million, which is 11 per cent. of the total rent bill. If these could be reduced, clearly it would help to produce the revenue needed for repairs to turn round the vacated property more quickly. Average rent levels are currently about £18 a week, significantly below the equivalent rent levels in Wandsworth. Nevertheless there is a higher percentage of rent arrears.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Does the Minister know that this week the borough council agreed to increase rents in Newham higher than the guideline recommended by the Government?

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

I did not know that, but I welcome it because at present the rents are significantly below those of some other boroughs and it is important, if council tenants are to be given the quality of repairs that they rightly demand, that they should be expected to make a proper contribution towards the cost of council housing. If the rents have increased above the guidelines, that should help the finances of the borough, but it will not help them as much as if the borough recovered the rent arrears and ensured that it got the rent in when it fell due.

With the borough proposing to dispose of eight empty tower blocks in 1988–89, together with other properties, the prospects for a substantial increase in capital receipts are good and will be further enhanced by the recent dramatic upturn in right-to-buy sales in the borough. The hon. Gentleman probably realises that by increasing rents, families in a position to purchase are often more inclined to purchase because by doing so they can avoid paying those higher rents. That is a way of generating additional capital receipts, which can be ploughed back and used for further investment in housing.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

Is the Minister suggesting that capital receipts from the sale of redundant tower blocks plus capital receipts from the sales of council houses will be sufficient to build an equivalent number of new houses? Would the council be allowed to do that if it were found that the receipts were sufficient to enable it to be done? Surely the receipts would not be sufficient to achieve that objective.

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

I cannot say exactly how much it would cost to build that for which the hon. Gentleman is asking. There is much evidence to suggest that, currently, the borough is not using its best endeavours to sell as many properties as it can under the right-to-buy-legislation. It appears that it is not using its best endeavours to sell all vacant properties. I have said, however, that I am pleased to note the progress that is being made. It will ensure that in future the borough will have a greater income from capital receipts to supplement its housing investment programme allocation.

The Government are concerned to see a greater involvement of housing associations in the provision of social housing. To this end, the Government are increasing the size of the Housing Corporation's approved development programme in the borough from £13 million in 1987–88 to £14·1 million in 1988–89. Taking the capital side as a whole, from returns made by the authority, it appears that Newham had more than £5 million spare capital resources within the control system in 1986–87 than the council chose to use. The margin in the current year seems likely to be at least as large.

It has been argued that Newham has more of the nature of an inner-city borough rather than that of an outer London borough. That is an arguable assertion. It is an education authority, unlike inner London boroughs which have to contend with the Inner London education authority. I agree that Newham shares many of the problems of our inner cities. The borough will therefore benefit from the enhanced measures announced by my right hon. Friend the Prime Minister on Monday. The Government have committed £3·7 billion through the Department's group of programmes since 1979. That is an addition of main programme housing and local government resources. This sum has attracted over £2 billion in private investment. Between 1979–80 and 1988, real terms expenditure on the group will have increased by about 58 per cent.

The urban programme was the first major public spending programe targeted solely on the inner cities. This year, it will have funded 10,000 projects through specific grant to local authorities. It is helping local people help themselves, and it is encouraging enterprise. It is supporting nearly 90,000 inner-city jobs and training places. The new simpler city grant for private sector will build on the success of urban development grant and urban regeneration grant. Estate action has allocated £75 million this year — there are over 100 new schemes—which is improving the quality of life on run-down housing estates. Funding is rising to £140 million next year.

Having already dealt with the resources available to improve housing in Newham, which will make a major contribution to reducing inner city deprivation, I draw attention to the London Docklands development corporation. About 28 per cent. of the borough's boundaries come within the corporation's area, and the corporation has made a major contribution to the economy in that part of London.

Concern has been expressed that some of the residents in Newham will lack the skills necessary to win the jobs that will become available. There will be new employment opportunities. This is an issue for the local education authority to address. It is important that the education performance of the borough should be improved so that residents and their children are trained to the level that will enable them to take up the new job opportunities. I am sure that the hon. Member for Newham, North-East (Mr. Leighton) will welcome the massive new job opportunities that the LDDC has generated. In the light of the progress made by Newham in its first year as an urban programme authority, its allocation for 1988–89 has been increased to £2·25 million. That is a cash increase of nearly 30 per cent. I hope that the borough will also be able to benefit from the schemes initiated by the private sector under the new, simplified city grant that was announced on Monday.

There is some good news for the people of Newham. I am pleased to say that, to an extent, the borough council is co-operating in recognising that it must work with the private sector and encourage enterprise and initiative. That is the way in which the problems of Newham will eventually be solved.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Will the Minister respond to my invitation to the Secretary of State or the Chancellor of the Duchy of Lancaster to spend a day in Newham discussing the borough's problems with the borough, to see whether it is possible to arrive at a mutually agreed response to what we describe as a fair deal for Newham?

Photo of Christopher Chope Christopher Chope Parliamentary Under-Secretary (Department of Environment)

I am not in charge of my right hon. Friend the Secretary of State's diary. The hon. Gentleman knows that my hon. Friend the Minister for Housing and Planning visited the borough last October and had some useful meetings—

The motion having been made at half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at Three o'Clock.