Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.Donate to our crowdfunder
The hon. Gentleman makes a good point, which I entirely understand. What often happens is that the local authority, when consulted by the developer, would prefer the money to be used for improving housing adjacent to the development or for building more housing, rather than for what is strictly infrastructure.
I shall give the very best example I can. There is a huge development, which has had local support, called the Shard of Glass at London Bridge. It will be the tallest building in London. It has obtained planning permission and there was no significant objection, but it is cheek by jowl with housing estates, mainly local authority ones. When the development was applied for and agreed to, local people asked, "What's in this for us?" Obviously, it will change their skyline when there is a huge building outside their windows.
The council in that case has been able to negotiate to get some section 106 money, but what it most needed it for was not what could strictly be called the infrastructure to do with that development. It would rather have used the money for something else. My Bill seeks to give the option-only to give the option, not to be prescriptive-to the local authority to say, "We are satisfied that the infrastructure consequences of the development can be met. We do not need to adjust the pavements, re-route the roads or put in more drains. What we need locally is, for example, to insulate the windows of the estate next door so that the noise from the construction work and later, when the building is in use, will not adversely affect the homes on that estate."
I understand that the hon. Gentleman wants to make sure that there is clarity about using the money for such purposes. Some local authorities have taken the risk, as I understand it, and used section 106 money for those purposes. Most of them believed that that was slightly beyond the original purpose, so have not done so. The Bill makes it clear that that is an option if the local authority wants it.
Following from the hon. Gentleman's good point, I should say that sometimes in a development negotiation, the outcome can be that the developer agrees voluntarily to build some affordable housing next door as part of the development or to give money for it to be built or to improve housing.
My proposals would not change that process, because I seek to ensure that, when local authorities receive the money, they do not need the developer's agreement to undertake the work that they have prioritised. In case the hon. Gentleman does not know, I should say that my party and his party have jointly administered my local authority for the past four years, and his colleague, who is the executive member responsible for housing, agrees with those priorities.
There is also an independent argument in support of my proposal. Southwark council recently commissioned from the Local Government Information Unit a study to seek advice on how it might maximise revenue to deal with our borough's housing needs. The study's recommendations were published the other day and included the suggestion that central Government accept the shifted allocation of local resources. The study also supported debt restructuring. Southwark has a huge historical debt from housing that no longer exists and it wants to restructure that debt so that it does not have to pay as much in the short term. It would be able to spend less of its income every year on legacy bills and get on with building houses.
The report also made other proposals on, for example, Government land lending, but it also recommended
"enabling local authorities to make an independent judgment on the use of planning gain, including using commuted sums from private development for the renewal of housing in the immediate area."
The local authority received the report from an independent non-party body, which said that that proposal was a good option for maximising revenue and for housing.
We are talking about large sums of money, but, interestingly, there is no simple read-across grid of how much section 106 money goes to every local authority. Kate Hoey and I have worked hard to ensure that her local borough, Lambeth, and my local borough, Southwark, produce those figures, and they have. The most recent estimate relates to 2005-06, when the total value of section 106 obligations in England was £4 billion, and £3 billion is likely to be delivered in practice, so the yearly sum is significant. Birmingham city council signed 43 agreements in 2008-09 worth £5 million; Camden council received almost £3.5 million in 2008-09; Islington council has received £23 million since 2005-06; Southwark council signed 45 agreements in 2007-08 worth £15 million; and Tower Hamlets council has received almost £54 million since 2000. Those significant sums of money could make a big difference, and good local authorities, of which Southwark is one, now produce section 106 reports that list all the money that they receive. There was always a problem with transparency, so communities did not know where the money went, but authorities are now much better. Lambeth, next door, has become much better at sharing and discussing that information with the community, so councils of all colours have realised the benefit of making the process much more transparent.
The Government were very keen on the decent homes programme, and I supported it. Mr. Prescott launched it when he was the Minister responsible for housing, and it was due to end this year, but unfortunately it is not going to, because not all the homes that were planned for upgrading have been upgraded. According to the figures that I have, 305,000 have not been upgraded, and the programme is projected to be £18 billion over budget. It is now accepted that not every home in council housing and social housing stock will be a decent home, as defined by the programme, by 2010.
Southwark-the borough that I know best-has estimated that it needs £300 million over the next five years to meet the minimum requirements of the decent homes standard, and up to £700 million to meet our local standard. Clearly, we do not have that income available. The council is very clear that we should be allowed to recycle our debt-I raised this with the Minister the other day, and he was not unsympathetic in terms of national policy-and borrow money at lower interest rates. We are often hemmed in by agreements that require us to borrow at 8 per cent., whereas on the commercial market one could get a loan at 2 or 3 per cent. If we were also allowed to use section 106 money, that could make a significant difference to the renovation of our housing stock, which we could carry out ourselves, and to the new-build housing that we could produce.
I know that the Government have the community infrastructure levy plan in the pipeline. However, given that that project was due to come into operation in April, and that we know that a general election must happen in June at the latest, so Parliament will finish in May at the latest, we must be realistic about its not being a white knight that is going to ride to the rescue. I am therefore keen to see whether we can make this very modest change in legislation. It would change one small bit of one existing Act of Parliament, but in a way that could make a significant difference to every local authority that is a housing authority and a planning authority and is under real pressure to provide more affordable housing. Every council in England would tell Ministers that that is one of the big pressures that they are under, and the Department knows that.
I hope that colleagues in all parts of the House will allow the Bill to make this a hat trick, and that today or next week it can pass from Second Reading into Committee and come out as a piece of legislation before the general election. I am grateful for colleagues' attention, and I commend the Bill to the House.
Copy and paste this code on your website