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.