Bills Presented – in the House of Commons at 9:52 pm on 17th January 1991.

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

10 pm

Photo of Edward O'Hara Edward O'Hara , Knowsley South

I wish to take this opportunity further to draw the attention of the House to a subject which had a poignant topicality just before Christmas because of its biblical connotations—homelessness. After Christmas the problem has not gone away and I feel that it should be kept before us.

The genesis of my desire to bring homelessness to the attention of the House was a question to the Minister for Housing and Planning about the statistics of homelessness. The issue raised in my question was never resolved. No one knows how many homeless people there are in Britain. The official statistics published for the Department of the Environment record only homeless households which apply to and are accepted by local authorities. Many do not qualify to be accepted, including people without children and under retirement age. Non-priority groups are at least as great in numbers as priority groups, so one can double the official statistics of 120,000 homeless households. That is the figure for 1989. If one accepts that two thirds of homeless families have dependent children and that the average household consists of three people, it becomes clear that the official statistics involve approximately 300,000 people. If one adds in those who are not accepted by local authorities, the figure rises to 500,000. That is the number of people who became homeless in 1989.

The problem is growing. Ten years ago the official figure was 53,000. The average annual rate of increase in homelessness acceptances between 1976 and 1988—again according to Department of the Environment statistics—was 8 per cent. for London but 16 per cent. for other metropolitan districts. Two conclusions can be drawn: first, the curve is upwards and, secondly, homelessness is a national problem. We should remember that those are only the official statistics recorded by the Department of the Environment.

I wish to consider who are the homeless people, where they are, why they are homeless and the cost of keeping them without homes. I shall then examine some of the initiatives taken and conclude by suggesting other initiatives that might be effective. The homeless are generally people on low income or no income. They are vulnerable groups such as the migrant unemployed who move to the cities for work but are unable to find homes and people who suffer from discrimination in the private rented sector such as families with small children, pregnant women, single parents and ethnic minorities. Many such people can be found in the official statistics, but many others cannot. The unofficial statistics include victims of the present system of welfare benefits such as 16 to 17-year-olds who do not qualify for benefits. Young people receive benefits on a sliding scale based on age, but, of course, rents are not based on a sliding scale.

The unofficial figures also include people of all ages who are in a Catch 22 situation. They cannot afford the deposit on accommodation because benefits are no longer paid in advance and it is difficult to claim benefits if one has no address. Let us not forget the social inadequates, not least the pitiful cohort of mentally disturbed who are discharged on to the streets without proper support. Huge numbers of these latter groups do not show up in the official statistics. There is also the phenomenon of the 1980s, and particularly the late 1980s, the mortgage defaulters whose number has quintupled over the past 10 years from approximately 20,000 to over 100,000 per annum. That is who they are.

Where are they? Those who are fortunate to be provided with accommodation are, in large numbers, in temporary accommodation of various kinds, such as hostels, short-life properties, mobile homes, bed-and-breakfast accommodation and, perhaps the most fortunate, in properties leased by local authorities from the private sector. That is the private sector leasing group to which I shall refer as PSL. I shall address further remarks to the bed-and-breakfast and PSL groups. Those not provided for find shelter either in overcrowded circumstances in the homes of family or friends, frequently dossing on floors—they include large numbers not counted in the official statistics—or, as we see if we go not far from the Chamber, they live rough on the streets.

Why are those people homeless? The simple answer is that there is a lack of accommodation for rent at a price which they can afford. One feature which most of them have in common is that they cannot contemplate purchasing accommodation. The statistics for rented accommodation as a proportion of the total housing stock are interesting. In 1981 there were 6.6 million public sector rented units; in 1990 there were only 5·5 million. In the private sector in 1981 there were 2·4 million rented units; in 1990 there were only 1·7 million. Admittedly, there has been a small rise in the housing association rented sector, from 456,000 in 1981 to 642,000 in 1990, but it is pitifully small and not enough to bridge the gap.

The most important contributing factor has been the huge number of council homes taken out of the stock under the right-to-buy legislation and the fact that councils have been prevented from using most of their capital receipts to build new council houses. National Economic Development Office statistics show that in 1980 council new starts were 41,000, complemented by 15,000 housing association new starts; in 1990 the total has gone down to 24,000, composed of 8,000 council new starts and 16,000 housing association new starts. The figures show a small but inadequate increase in housing association provision. The projections for 1992 are even more gloomy—a pitiful 3,000 new starts in the council sector and 2,000 in the housing association sector.

There is a cost in all this homelessness. First, there is a monetary cost. The Department of the Environment calculation for keeping a family in bed-and-breakfast accommodation as compared with building a new council house shows that in London the cost of a new build is £7,400 while the cost of bed-and-breakfast accommodation is £11,315 per family. In other metropolitan districts, such as Knowsley, South, the difference is even more significant; the cost of a new build on average is £3,200 while the cost of bed-and-breakfast accommodation is £9,490. Those are the Department's own statistics at 1988 prices.

Only this month the Chartered Institute of Public Finance and Accountancy, a reputable body, produced figures for the net cost per head of population of keeping people in bed-and-breakfast accommodation. It went up from 83p in 1988–89 to £1·50 in 1989–90, an increase of 80 per cent. The same set of statistics shows that the total net expenditure on homelessness in 1989–90 was equivalent to £2·79 per head of population or, if translated into the cost per charge payer, £3·79. Some estimates suggest that the cost per charge payer could rise to £24 in London. All bets are off on this, of course, while the poll tax is still in the massage parlour.

I have listed the monetary costs of homelessness, but there is also a human cost. I recommend to the House two documents—"A Crying Shame", which concentrates mainly on the effects of homelessness on children and has been produced by the London Boroughs Association, and "Homeless Families and their Health", which was produced jointly by the Health Visitors Association and a committee of the British Medical Association. There is also much anecdotal evidence of damage to physical and mental health caused by homelessness and the dangers posed to the safety of children when in temporary accommodation. There is also evidence of a drift into crime and prostitution, both male and female, among young people caught in the homelessness trap. People who have no accommodation or live in inadequate accommodation often become victims of crime. Those human costs are also translated into further monetary costs when one calculates the demands that they produce on the welfare services and the health service.

There have been a number of Government initiatives. The document produced by Shelter, "No New Homes", tabulates 10 such initiatives from 1986 through to 1993. Credit must be given to the Government for those initiatives, but, welcome though they are, unfortunately they are often inadequate. The Government's own welfare benefit system as now structured compounds the problem. A series of discreet initiatives do not add up to an adequate and coherent policy on homelessness.

The estate action scheme was never adequate in scale and represented, not new money, but money top-sliced from the reduced housing investment programmes. It was also subject to task force criteria which did not necessarily meet local housing needs.

In December the autumn statement included a seemingly generous statement from the Minister for Housing and Planning of £81 million to housing associations to provide hostel and long-term accommodation in London. That money will have some effect, but only in London.

Private sector leasing was first limited by the Government to 10 years and then to three years. The Local Government and Housing Act 1989 resulted in those leasing arrangements being set against borrowing approvals. In October 1990 the hon. Member for Worcestershire South (Mr. Spicer), then Minister for Housing and Planning, announced changes in the amount of subsidy to local authorities with the result that local authorities now tend to opt for bed-and-breakfast accommodation that attracts a higher subsidy. Outside London such accommodation does not attract a higher subsidy and any differences in costs must be passed on by the local authorities in higher rentals or on to the hard-pressed poll tax payer.

I have suggested that private sector leasing is preferable to bed-and-breakfast accommodation, and in many ways it is, as the problems associated with bed-and-breakfast accommodation are well-known. However, at least monitoring procedures exist for such accommodation. No such procedures operate for private sector leasing, but it should be remembered that short-term leasing of that sort still represents temporary accommodation and that it varies tremendously in quality. Guidelines and systems must be introduced to ensure the enforcement of quality.

What should be done? First, there should be a significant change in attitude. We must recognise that homelessness is a national problem and not one that merely affects London. It should also be recognised that recent initiatives have been ad hoc and marginal in their effect. There is also a need to face up to the scale of the problem and a serious attempt should be made to assess it. Local authorities should be allowed to play their proper role in co-operation with, and complementary to, other agencies in solving that problem. If we consider those implications, we see that a number of positive measures can be taken.

The code of guidance on homelessness should be strengthened in a number of ways on which I do not have the time to elaborate. We should extend the priority groups, and in particular strengthen provision for children. The code should be made statutory. We should not allow local authorities to be deemed to have discharged their responsibilities by providing temporary accommodation of various sorts. There should be a further look at the welfare benefit system to eliminate some of the anomalies that I mentioned earlier.

More money must be allocated to the local authorities and housing associations, not top-sliced, as hitherto, so that the limited initiatives taken so far can be taken further. The restrictions on private sector leasing, apart from those on quality control, should be revoked.

There are also a number of initiatives to be considered that need not cost money. We could freeze the rents-into-mortgages scheme until it can be seen that the crisis of homelessness is on the way to being solved. We could have a mortgages-into-rents scheme rather than let people lose their homes. The sale of council houses on the open market could be restricted where it can be shown that there is a problem of homelessness in the district. Most importantly, the embargo preventing local authorities from using more of the £7·3 billion capital receipts that have accrued since the right-to-buy legislation was introduced should be lifted. That extra money could be used for a crash programme, including using local authority new stocks, bringing back into use the thousands of voids in the public sector that need renovation before they can be occupied and purchasing similar voids, in whatever condition, in the private sector.

I make a special plea for a step that could be taken without any cost, and for which I understand there are moves afoot elsewhere: the repeal of the Vagrancy Act 1824. It contains nothing that is not covered by some other Act. Its repeal would mean that those who, at present, suffer the tragedy of being homeless and living rough on the streets would not be classed as outside the law and subject to the harassment that that entails.

The crisis of homelessness can be solved with an injection of money—that is necessary. But how much could be achieved with just a change of attitude and a little imagination? In the words of the document produced by the London Boroughs Association, which addresses itself particularly to the plight of homeless children, "It is a crying shame."

Photo of Tim Yeo Tim Yeo Parliamentary Under-Secretary (Department of Environment) 10:18 pm, 17th January 1991

I congratulate the hon. Member for Knowsley, South (Mr. O'Hara) on his success in obtaining an opportunity so early in his parliamentary career to raise this important subject on the Adjournment of the House. I am only sorry that he resorted to the use of such misleading statistics and tendentious arguments. In the time available, I shall try to set the record straight on the Government's housing objectives and point to the considerable resources that we are devoting to housing over the next few years.

First and foremost, the Government are committed to ensuring that decent housing is within the reach of all families. The need to reduce homelessness underlies all our housing policy. It is good news that the total housing stock has risen by almost 2 million units since 1979—a fact conveniently and completely ignored by the hon. Gentleman in his selective reference to the reduction in the size of the rented sector. The ratio of homes to people has never been higher. Not only on Merseyside but across the country there is no overall housing shortage.

Most people want to own their own homes, and our policies, notably the right to buy, introduced in the face of consistent resistance from some local authorities, have brought home ownership within the reach of more people than ever before. The hon. Gentleman did not say whether he favours the expansion of home ownership, but his opposition to the rents-to-mortgages scheme, still at an embryonic stage, suggests that he shares the hostility to it which is so widespread in his party.

We recognise that in some parts of the country there is a need for additional subsidised housing where people cannot afford to buy or cannot find private rented accommodation. This need not mean building more council houses. There are alternative ways of increasing provision of low-cost housing. Instead of relying on local authorities as the sole monopoly provider, we have encouraged them to play an enabling role through sponsorship or housing association schemes and by promoting locally the expansion of the private rented sector.

Housing associations are now the main providers of new subsidised housing. We have reformed housing associations finance to allow the maximum use of private money to supplement public funds. The resources available to the Housing Corporation have been increased from £1·1 billion this year to over £2 billion by 1993–94. These measures will permit a sustained increase in output of subsidised housing by housing associations from 21,000 units last year to about 40,000 by 1993–94.

It is also important to ensure that this substantial increase in output is directed to the areas of greatest need. In 1989 we carried out a review of the method used to allocate Housing Corporation resources between regions.

The total housing public expenditure programme remains very large. Public expenditure on housing next year, including local authorities' self-financed expenditure from receipts, will amount to more than £8 billion. Of this, £3 billion will be available for local authority housing capital investment. The mechanism for regional allocation of resources, the general needs index, has been revised, allowing improved targeting on areas with homelessness pressures. Another £3·5 billion will go on subsidising current expenditure, including rent rebates. The remaining £ 1·5 billion goes to finance new house building by housing associations. This represents a very substantial public investment in housing, and is in addition to the £7 billion a year in tax relief to owner-occupiers.

The Government are frequently attacked for the decline in the overall size of the rented housing stock, in particular for the effects of allowing council tenants to buy their own houses. The crucial factor, however, is the total number of lettings to new tenants, which has remained relatively stable at about 500,000 per year. This is because there has been an increase in the rate of turnover of lettings, particularly in the private sector. In spite of sales of over 1 million council homes, total annual council lettings have fallen by only about 50,000 a year. It should also be recognised that many of those who bought their council houses would in any case have remained as tenants for many years.

Deregulation is also helping to slow down the decline of the private rented sector. Since we expanded the business expansion scheme in 1988 to cover companies specialising in residential lettings, about £550 million of new money has been raised from the private sector, which will provide about 10,000 houses. Housing benefit is, of couse, available, generally up to market rent levels, to assist those who have difficulty in meeting their full housing costs.

The hon. Member suggested that we should allow local authorities to spend more of their capital receipts from right-to-buy sales to finance new provision. This proposal, which we hear frequently, is based on a misunderstanding. The Government must regulate gross public expenditure, including spending from receipts, in the interests of managing the national economy. If authorities were allowed to use more of their receipts, the Government would have to reduce the total of new borrowing approvals and capital grants correspondingly to maintain the same level of total expenditure. This would mean that the pattern of expenditure would be determined mainly by where receipts happened to have arisen, and not necessarily in areas of greatest need.

The new rules that we have introduced require authorities to set aside part of their receipts for debt redemption, and the new power to take availability of receipts into account in making capital allocations means that about three quarters of authorities' total capital spending power derives from allocations made in accordance with assessed need, compared with only one third under the former system. So we are providing for more investment by the authorities that actually need it. Overall, we have reviewed housing policy, and we have taken steps to increase the supply of low-cost housing.

It is important to distinguish between those who are literally homeless—sleeping rough on the street without a roof over their head—and the larger number who are accepted as homeless by local authorities under the statutory provisions.

The most serious and acute symptom of homelessness is people sleeping rough, particularly in London. The Government are taking positive steps to deal with that. During the next three years, £96 million will be available to provide short-term direct access hostels for people on the streets and longer-term accommodation for people in existing hostels.

That initiative has been given a valuable impetus by the secondment to my Department of Nick Hardwick, director of Centrepoint Soho, a leading voluntary body dealing with young homeless people who come to London from all parts of the United Kingdom.

The problem is at its worst in central London, so that is where we are concentrating initially. It is hard to be precise about numbers, but there are estimated to be between 2,000 and 3,000 people sleeping on London's streets, out of a total of about 5,000 throughout the country. In due course, we will consider how the initiative could be extended to other areas.

I have spent some time dealing with the initiatives that we are taking to reduce the number of people sleeping rough in London, but I must stress, since the hon. Member focused his remarks on this, that we are equally concerned to relieve the pressures that local authorities face in assisting homeless families who apply to them for help.

We are taking action on a number of fronts—to improve local management; to minimise the use of unsatisfactory bed-and-breakfast hotels by allocating funds to bring empty accommodation back into use; to improve advice services aimed at preventing homelessness; and to ensure that a more efficient and consistent homelessness service is offered by local authorities.

Those measures will help all those people who are seeking better accommodation, regardless of whether they fall within the definition of statutory homeless. My Department would certainly take issue with the hon. Gentleman's claim that the official homeless figures understate the nature of the problem. If anything, the reverse is true, as many of the people who are in that category are adequately housed at present.

I regret that the hon. Gentleman quoted, quite unquestioningly, some of the misleading statistics provided recently by CIPFA and Shelter about the relative cost of new building and the cost of bed and breakfast. CIPFA has acknowledged that some of the recently publicised figures that it produced were wrong.

The Government's review of the homelessness legislation was published in November 1989. It concluded that the legislation was doing the job intended by Parliament. But it recognised that there was room for improved management of stock and handling of homelessness by local authorities.

Unfortunately, many local authorities, including Knowsley, still have a poor record of making proper use of their housing resources. There are about 100,000 empty local authority dwellings—about 2·4 per cent. of the total stock. In Knowsley, the figure is 5·3 per cent. We are therefore encouraging better management by the introduction of mandatory performance indicators which will allow tenants to assess how good a job the authority is doing as a landlord.

Even with the optimum use of stock, there are some areas where authorities need additional resources to help them to meet their statutory obligations. We are therefore making available considerable sums in the worst pressed areas in London and the south-east. Our prime objective is to reduce the use of bed-and-breakfast hotels for families. Priority is being given to schemes to bring empty local authority and housing association properties back into use.

Additional allocations of £300 million are being made over this year and next—£227 million will go to local authorities and £73 million to housing associations. So far, approval has been given to schemes totalling £157 million, which should provide around 7,500 additional lettings. We are looking for a similar level of output from the resources available next year. Part of the additional homelessness allocation will also go in support of cash incentive grants to encourage better-off tenants to move into owner-occupation.

We are also funding a national homelessness advice service co-ordinated through citizens advice bureaux, with technical support from Shelter and the Shelter Housing Aid Centre. We have expanded support to individual projects run by the voluntary sector which provide practical advice and assistance to help single homeless find temporary and permanent accommodation. This year, £2 million will be made available, about half of which will go to the advice service.

This has been something of a whistle-stop tour of the main initiatives that we are taking forward to help relieve and reduce homelessness. As I have explained, the most difficult area of all is that of rough sleeping. It is our aim that assistance should be available to anyone willing to take advantage of it so that, eventually, no one need sleep without a roof over his head.

We are also deeply concerned about the increasing number of households accepted as homeless by local authorities and the number of families forced to live in temporary bed-and-breakfast accommodation. We have responded positively by allocating £300 million in additional resources to increase the supply of permanent housing and thus reduce authorities' need to use unsatisfactory temporary accommodation.

In addition, we have recognised the importance of helping those at risk before they actually become homeless by funding the national homelessness advice service, and we have assisted young and single homeless people to find temporary and permanent accommodation through increased funding of practical voluntary sector projects.

In total, those initiatives add up to a significant package of both housing and human resources that should have a positive impact in assisting those in greatest housing need.

Question put and agreed to.

Adjourned accordingly at half-past Ten o'clock.