Public Accounts Committee

Part of the debate – in the House of Commons at 6:29 pm on 17th October 1991.

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Photo of John Battle John Battle , Leeds West 6:29 pm, 17th October 1991

I do not have the privilege of serving on the Public Accounts Committee. However, I wish to comment on three of the reports before us which relate to the work of the Department of the Environment. They are the 33rd report on regenerating the inner cities, the 22nd report on homelessness and the 19th report on privatisation in the new towns.

The Department of the Environment is primarily responsible for policy action in our large cities. Today, the Archbishop of Canterbury pointed to the worsening conditions in our inner-city areas and to the gulf between inner-city and suburban areas. Over the years we have seen under this Government a series of initiatives, some of which have sparked, quickly flared and then died away, whereas others are still with us. The initiatives have included the urban programme, the partnership programme with local authorities, urban development grants, urban regeneration grants, city grants, derelict land grants, the urban development corporations, enterprise zones, estate action, housing action trusts, inner city task forces and city action teams. More recently there has been the city challenge and most recently, and as yet untitled, the competition for housing resources initiated by the Secretary of State for the Environment whereby local authorities are invited to take part in a competition for housing investment funds. Sadly, the list is restricted to certain cities and others are not invited to apply. Not all the projects have been subjected to detailed critical scrutiny.

I welcome the report by the Public Accounts Committee into regenerating the inner cities. I will focus on one tiny part of the initiatives. One section of the report deals with city action teams and task forces. Paragraph 8 says: The 16 task forces have been enthusiastically developed and are well managed, but their project management responsibilities have increasingly diverted them from their primary role of stimulating the regeneration efforts of other organisations. However, the Department of Trade and Industry told us that they had recently re-emphasised to the task forces that building up the capacity of local organisations was a vital part of their role. The conclusion in the report on the co-ordination of programmes refers to a "shift of resources away" from local projects which has resulted in some important projects being closed. That section of the report refers to the community programme. The same is happening with some of the other task force projects in which there is a shift away from the local community.

I will give one example from my city. A sight and sound project is run in conjunction with the Yorkshire Post newspaper group. It was the task force project and was based in Jamaica house in Chapeltown, Leeds. It did very good work in helping black ethnic minority groups to set up businesses and was involved in getting community economic projects off the ground.

About a year ago, everything associated with that task force project was shifted away from the local area back to the Yorkshire Post headquarters building outside the local community. In effect, the project was closed down and resources were shifted out of the inner-city area for which they were intended to elsewhere in the city. The Parliamentary Under-Secretary of State for Industry and Consumer Affairs was approached about the matter, but he refused to meet and discuss the matter with the local authority chair of the race equality committee, Councillor Fabian Hamilton, on behalf of the local Chapeltown community, and he said that nothing could be done. I urge the Treasury to investigate ways of examining how funds are used by the organisations to which they are given.

The question arising in the projects is whether the funds are used for the purpose for which they were originally intended. There are questions about public accountability. As the report makes plain, the primary purpose of projects for the inner cities should be that they are based in the inner cities so that people there can benefit from them. There is unfinished business and work that still needs to be done in the Chapeltown area. I hope that Ministers will examine the matter.

The second conclusion of the Public Accounts Committee was this: We note the efforts made to co-ordinate inner city programmes at local level; but the multiplicity of bodies and initiatives involved is potentially a recipe for confusion and overlap. We expect the departments to watch the position closely. I hope that we, as Members of Parliament, will watch the position closely and that we shall urge departments not to be complacent in the matter.

The 22nd report concerns homelessness and was published in July this year. The first conclusion states: We are gravely concerned that homelessness has more than doubled over the last decade … official statistics may well significantly understate the true scale". The report then spells out the position. It says that the number of households accepted as homeless rose from 56,000 in 1979 to 145,800 in 1990. Since that report was published in July, the numbers of homeless people have continued to escalate. The number of people in temporary accommodation has risen to 55,300 according to figures released by the Department of the Environment this September. Similarly, the numbers in bed-and-breakfast accommodation have risen from 12,240 at the end of April to 13,330 at the end of August. The crisis of homelessness is worsening around us.

The report on page 17 on the action taken by the Department of the Environment concluded: We note the improvements being made in the Department's arrangements for allocating resources to local authorities for general housing purposes, and we support the aim of targeting resources increasingly on authorities with the worst housing problems, including homelessness … We note the measures the Department are now taking to tackle homelessness and we expect them to keep the position under close review and to take further action as necessary". In the Treasury minute relating to the report by the Public Accounts Committee, the Department responded by referring to the improved arrangements for the allocation of resources. It referred especially to the £300 million special allocation for the years 1990–92 which is available for local authorities and housing associations provided that they are in London and the south-east of England. Northern cities could not apply for that special allocation.

Homelessness is not limited to the south and to London. When coupled with the skewing of the Housing Corporation's allocations to housing associations—again heavily in favour of the south-east region and not even in favour of the inner London boroughs—it is not surprising that there is some bewilderment in the north about the Government's claim to be targeting resources to the authorities with the worst problems. We do not resent resources going to tackle homelessness in London and in the south-east, but it seems to us that tackling homelessness in northern cities as well may mean that homeless people do not set out on the trek south to London to add to the numbers of the homeless here.

Following the publication of the report of the Public Accounts Committee, the Department of the Environment produced a revised code of guidance on homelessness. It also revised what are now called the quarterly statistical returns which local authorities make about their action under the legislation for tackling homelessness. Since June 1991, revised reports have to be presented every quarter. That means that the latest quarterly returns are now available.

In Leeds, the quarterly returns that are just out show that there was a 60 per cent. increase in the number of homeless households who approached Leeds city council over the past year. There is an especially large increase in the scale of single homeless people. In 1991 the number of households accepted as homeless was 1,290. The figure has gone up this year to 2,066. The number of households accepted as homeless and in priority need in 1990 was 1,262; it is now 2,050.

The number of households resident in temporary accommodation has risen from 118 in 1990 to 307 in 1991. The needs of the homeless are increasing still. On top of that, the general waiting list has risen to 23,000 this year from 19,000 last year and the waiting list of people with special housing needs, as specified under the new guidelines, has also increased.

I would classify what are known as concealed households as the hidden homeless. In 1990, 650 single households were classified as concealed, a number which rose to 878. The number of married households in that category rose from 1,990 to 2,687. So the numbers of households on the waiting list have risen, as have the numbers of households with special needs, and overall there has been an absolute increase in the number of registered homeless households—even under the revised guidelines.

Paragraph 15 of the report concludes: We note the Treasury's assurances that within … total resources … local authorities are free to tackle homelessness by capital expenditure rather than bed and breakfast. We recommend that the Department should issue revised guidance on what is allowable. Although the report challenges the huge waste of resources involved in bed and breakfast, there is a practical alternative that could be implemented quickly: the Government could allow local authorities to use their capital receipts from council house sales to build new dwellings for rent. I cannot agree with paragraph 7, which states that, in the Department of the Environment's view, the decline in the local authority housing sector of about 1 million units over the last decade through the 'right to buy' policy had not yet led to a significant loss in the number of rented houses available. I cannot believe that that is true. The reduction in the amount of public rented housing is a major factor in cities such as Leeds, where the declining amount of such housing–8,500 units lost—means that constituents in difficulties with their mortgages, who assume that they can be slotted into local authority housing, cannot be because of the shortage.

Leeds has one of the lowest rates of void properties, at 0.89 per cent. That compares favourably with the national average of 2 per cent. and extremely favourably with the figure for Government-owned properties—primarily owned by the Home Office—which is running at 18 per cent.

There is no room for the homeless in local authority housing, which is shrinking away. The absolute shortage of housing must be dealt with. While it remains, it is a major factor in rising homelessness in our towns and cities.

I was also surprised at the PAC report's failure to mention the denial of access to income support and hence to housing benefit or help with rent for the under–18s. That policy change was effected a few years ago by the Government and the action taken by the Department of Social Security is generating homelessness among single young people. I hope that the PAC will examine the interaction between the policies of the Department of the Environment on housing and the policies of the Department of Social Security. Between them, those Departments are adding to the problem of homelessness.

Treasury assurances on capital expenditure cannot be squared with the latest idea on which the Department of the Environment is insisting—that local authorities should compete for funds to repair council housing. The idea of competition for a restricted list of local authorities is not the way to allocate resources and it is far removed from the idea of allocation according to the needs index from which the policy originated.

The housing charity Shelter, in its recent report entitled "Urgent Need for Homes", pointed out that 500,000 new homes will be needed in the next five years to solve the housing crisis. That could be achieved with the use of funds amassed from council house sales and by reducing the exorbitant cost of bed-and-breakfast accommodation. The Government claim that they are tackling the problem of homelessness; I hope that they will concede that they are nowhere near solving it yet.

Tackling homelessness, actual and hidden, should be a top Government priority in any civilised society and the response to such homelessness should be organised on the scale and with the vigour and determination of the sort of resources and task forces that were used in the Falklands and the Gulf. The homeless are being denied their basic right to a home. They are due more than Government complacency and tinkering with the problem.

The 19th report deals with the privatisation of the new towns and recommends in paragraph 3: We do not accept that the novelty of the business venture arrangements was sufficient reason for the Department not issuing early guidance on the principles and procedures to be followed. Between April 1987 and September 1989 work for the development corporations of Milton Keynes, Telford and Warrington and Runcorn was privatised, but no cost objectives were set and at Milton Keynes important costing records were not retained—that is not to be regarded as a precedent. Some of the professional and support staff were encouraged into private business ventures to undertake work for the corporations under contract. Those bodies were allowed to break the same sort of rules that the Department of the Environment now suggests should be applied to local authorities. The Treasury note states: The Department also accepts that competition should be pursued wherever practicable and that, where there is a proposal by employees to establish a business venture, they should not normally be given a privileged opportunity to secure the work. The Department considers that exceptions might be justified where, as in the case of new town development corporations approaching wind-up, a particular premium is placed on retention of access to staff experience and expertise. These are the sort of arguments that might be deployed when the Government look at the future of local government. The very Department that broke its own rules on open tendering and competition in the case of the new towns now persistently hammers local government about competitive tendering for local government services. If the principles and practices applied to the new towns are allowed to remain, why are not they to be applied to local government? Local government would not be allowed to get away with what happened in the new towns, which resulted in a shoddy deal for public money.

The dogmatic "novelty" of privatising and selling off ventures should not override considerations of real value-for-money options and genuine accountability. I hope that we shall return to that point after the Queen's Speech, when the Government produce more proposals for privatising local government services.