Section 88 — Applicant's contribution to expense of works

Housing (Scotland) Bill: Stage 3 – in the Scottish Parliament at 5:45 pm on 13th June 2001.

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Photo of George Reid George Reid Scottish National Party 5:45 pm, 13th June 2001

Amendment 179, in the name of Kenneth Gibson, is grouped with amendments 180, 181, 182, 183, 184, 185, 186, 187 and 188.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

The minister will recall that I went into considerable detail during stage 2 in respect of means testing. I will not repeat the specific concerns of the Convention of Scottish Local Authorities, North Lanarkshire Council and Glasgow City Council that I quoted at some length in the committee, but I will quote further concerns that Glasgow City Council has raised. In a submission to the Local Government Committee, David Comely, the council's director of housing, stated:

"The proposed means testing regime is likely to be difficult and costly to operate and its cost effectiveness is seriously open to question. There does not appear to have been any systematic appraisal by the Scottish Executive of whether the savings from means testing will outweigh its costs. Most fundamentally, there is no indication that adequate resources will be made available."

He told the committee that "in the Glasgow context, means testing is likely to make it harder to achieve comprehensive renewal".——[Official Report, Local Government Committee, 23 January 2001; c 1454.]

The Local Government Committee concluded:

"The Committee remains unconvinced by the proposals for means-testing, and calls on the Executive to consider further, together with the housing improvement task force, whether more suitable arrangements can be brought forward."

That was echoed by the Social Justice Committee, which said:

"The committee is not yet persuaded by the proposals regarding means testing".

At stage 2, it became clear that none of the analysis that was mentioned by Glasgow City Council had taken place. We do not know therefore whether means testing will ensure more resources for those on low incomes who are seeking grant or whether it will simply be swallowed up by the bureaucratic cost of the test itself—the minister appeared concerned about that in respect of amendment 174. I therefore ask members to support amendment 179 and reject means testing.

Amendment 180 recognises the serious level of disrepair in many private homes and the struggle that householders have to meet the necessary costs of improvement and conversion, particularly in older, post-war housing. The amendment thus seeks to increase the percentage grant of the total cost available to a more realistic level.

Amendment 181 is simple and straightforward in that it simply locks the level of maximum expense at £20,000 in real terms. Even with inflation at 2.3 per cent, the value of the maximum expense will fall to £19,540 after the first year as the bill stands and it will decline year on year thereafter. That obviously discriminates against those who apply for a grant each year after the first and, while ministers can alter the amount, it is simpler and more straightforward to make it inflation-proof. Such inflation-proofing had the unanimous support of the Local Government Committee.

At stage 2, the minister made it clear that modifications would take place from time to time. Surely ministerial work loads—about which I am greatly concerned—would be reduced and the interests of applicants secured if grants were inflation-proofed. It is 14 years since the last review was undertaken and it would be grossly unfair to expect owners to suffer grant erosion over time: £20,000 should be the same in real terms in the future as it is now.

On amendment 182, each of the paragraphs of which it is comprised would inflation-proof the bill and simply update for each type of grant the amounts that were laid down in the Housing (Scotland) Act 1987. Just as the Executive has doubled the maximum grant that is available, the cash amounts that are detailed in amendment 182 simply double the maximum amounts of grant for each standard amenity for which an improvement grant can be sought. To be frank, it is a little sneaky of the Executive to increase the maximum grant from £10,200 to £20,000 without uplifting the amounts for standard amenities, which is what amendment 182 seeks to do. Without that uplift, the value of grant would simply decline year on year. Of course, that may be what the Executive really wants. Amendment 182 also seeks to set grant percentages at a more realistic and up-to-date level.

Amendment 185 seeks to do the same for repair grants as amendment 180 does for improvement grants.

I will not move amendment 186.

Amendment 187 seeks to inflation-proof the grant limits for fire escapes in houses in multiple occupation. The issue concerns public safety, so I hope that the Executive will look more fondly on the amendment than it did on my stage 2 amendment.

Amendment 188 would increase the grants that are available in housing action areas to ensure that, in terms of percentage, grants are at a level that will encourage the upgrade of homes that are in a state of severe disrepair.

I urge members to support all the amendments in this group.

I move amendment 179.

Photo of Bill Aitken Bill Aitken Conservative

Kenneth Gibson's arguments have considerable merit. We will support the amendments that would index-link the level of grant. That is consistent with the attitude that we adopted in the Social Justice Committee. What Kenneth Gibson said is eminently sensible, because the grant levels have not been looked at for many years. The amendments are unlikely to bring about any massive increase in public expenditure and I ask members to bear it in mind that the minister has control over the total amounts that are payable. The amendments would ensure that a reasonable level of grant assistance was available. When the level of grant falls below what is reasonable, jobs are done that are not worth while. Basically, grant money is wasted because proper repair projects cannot be completed.

We part company with Kenneth Gibson on amendment 179. To do away with the system whereby the total income of the household is considered would be extremely unfair on owner-occupiers who live on their own. Many of the problems that have arisen in the private sector have concerned widowed persons. We will not support amendment 179, but we will support the other amendments, which have merit.

Photo of Jackie Baillie Jackie Baillie Labour

Kenny Gibson has again lodged the raft of amendments that he lodged at stage 2. We rejected them then; we reject them now for the same reasons. However, I am grateful for his concern about ministerial work loads.

The effect of amendment 179 would be to remove the test of resources that the bill introduces into the improvement and repairs grant system.

Amendments 180, 181, 182, 183, 184, 185 and 188 would modify the existing grant system by increasing the various rates of the grants that are payable. The rate for repairs grants would be increased to 75 per cent and the rate for grants in housing action areas to 90 per cent. The maximum approved expense limits would also be increased by the amendments. For example, amendment 185 would increase the maximum for repairs grants to £9,600.

Under our proposals, grants would no longer be restricted to prescribed percentages—currently 50 per cent for most repairs. The new test of resources would provide grants at rates of up to 100 per cent for low-income households. Therefore, Kenny Gibson's amendments would disadvantage householders who are on the lowest incomes by restricting them to a maximum of 75 per cent for repairs grants and 90 per cent in housing action areas. The amendments would confine people to "approved expense limits" of, for example, £9,600 for repairs grants. We are proposing a new single limit of £20,000.

Another effect of Kenny Gibson's amendments would be to give high-income families a state subsidy. Under his non-means-tested system, everybody who qualified for a grant would benefit from the high rates that he proposes. Households that can afford the cost of works would not have to pay because the state would pick up the bill.

Amendment 187 proposes that the new unified "maximum approved expense limit" of £20,000 be uprated in line with inflation. I am not attracted to upratings on that basis. There is a danger that the upratings would cause inflation in the price of works. If we were to enshrine index-linking in legislation, we would surely be sending a signal that contractors can increase their prices by a few per cent every year in the knowledge that the approved expense limit would be increased anyway. How could best value be achieved in such circumstances?

In any case, the £20,000 is not an absolute limit. Local authorities can ask ministers for approval to pay grant on greater amounts in particular cases, if authorities think that there is good reason for the increased costs. That facility will remain. Of course, the £20,000 limit must be reviewed from time to time—we are not saying that it is to be unchanging. At stage 2, I gave an undertaking that the limit would be reviewed from time to time and I indicated that it might be sensible to consider that

"at least once every parliamentary session."—[Official Report, Social Justice Committee, 15 May 2001; c 2428.]

On Kenny Gibson's point about bureaucracy, we have undertaken to consult local authorities on the implementation of the provisions and, as I understand it, COSLA is happy with that.

We believe that the reform of the grant system as proposed in the bill will simplify the system and provide help where it is most needed. It will also extend the scope of the system, so that local authorities will be encouraged to give grant for home insulation, heating systems and home security measures. We believe that the new system will be a considerable improvement on the current one, and that it will be widely welcomed by low-income households. For those reasons, I ask the chamber to reject Kenny Gibson's amendments 179 to 188.

Photo of Kenneth Gibson Kenneth Gibson Scottish National Party

On the rate of inflation, it is pretty desperate stuff. The reality is that when people apply for grants, the lowest quotation is the one that is accepted. If builders were to do what the minister suggested, they would soon find themselves out of business. We are talking about the retail prices index generally, not just building works, so the argument is clutching at straws.

The minister's concern that only high-income families, or the "extremely well-heeled" as they were called at stage 2, would benefit is nonsense, because as was pointed out at stage 2, only those who are in council tax band E and below would qualify. Given that that limit is £80,000, which would not buy more than a one-bedroom flat in Edinburgh, I would hardly call such people extremely well heeled.

The big issue that has not been addressed is resources. One of the reasons why so few people can get grants is that in Glasgow, for example, the amount of owner-occupied grants has been reduced from £18.95 million to £3.5 million over the past four years, which is a fall of more than 80 per cent. If the jam is spread thinly, it is the fault of the Executive. I hope that the Executive will address that issue.

Glasgow City Council, which is not in COSLA, still opposes means testing, and we still oppose means testing, because as Glasgow City Council and others have said in committee ad nauseam, the Executive has not provided any detail over the past five months to suggest that the bureaucratic cost would not outweigh the perceived advantages of means testing. I urge everyone to support my amendments 179 to 188.

Lastly, as for the point that Bill Aitken made about amendment 179, I have no idea what he was talking about. I am perplexed. Perhaps he can tell me later.

Photo of George Reid George Reid Scottish National Party

The question is, that amendment 179 be agreed to. Are we agreed?



Division number 50

For: Adam, Brian, Campbell, Colin, Canavan, Dennis, Crawford, Bruce, Cunningham, Roseanna, Elder, Dorothy-Grace, Ewing, Dr Winnie, Ewing, Fergus, Ewing, Mrs Margaret, Fabiani, Linda, Gibson, Mr Kenneth, Grahame, Christine, Hamilton, Mr Duncan, Hyslop, Fiona, Ingram, Mr Adam, Lochhead, Richard, MacAskill, Mr Kenny, MacDonald, Ms Margo, Marwick, Tricia, Matheson, Michael, McLeod, Fiona, Morgan, Alasdair, Paterson, Mr Gil, Quinan, Mr Lloyd, Robison, Shona, Russell, Michael, Sheridan, Tommy, Stevenson, Stewart, Sturgeon, Nicola, Ullrich, Kay, Welsh, Mr Andrew, White, Ms Sandra, Wilson, Andrew
Against: Aitken, Bill, Baillie, Jackie, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Curran, Ms Margaret, Davidson, Mr David, Deacon, Susan, Douglas-Hamilton, Lord James, Eadie, Helen, Fergusson, Alex, Finnie, Ross, Fitzpatrick, Brian, Gallie, Phil, Gillon, Karen, Godman, Trish, Gorrie, Donald, Grant, Rhoda, Gray, Iain, Harding, Mr Keith, Henry, Hugh, Home Robertson, Mr John, Hughes, Janis, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, Jenkins, Ian, Johnstone, Alex, Kerr, Mr Andy, Lamont, Johann, Livingstone, Marilyn, Lyon, George, Macdonald, Lewis, Macintosh, Mr Kenneth, MacKay, Angus, MacLean, Kate, Macmillan, Maureen, Martin, Paul, McAllion, Mr John, McAveety, Mr Frank, McCabe, Mr Tom, McConnell, Mr Jack, McGrigor, Mr Jamie, McIntosh, Mrs Lyndsay, McMahon, Mr Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Monteith, Mr Brian, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Mundell, David, Munro, John Farquhar, Murray, Dr Elaine, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Radcliffe, Nora, Raffan, Mr Keith, Robson, Euan, Rumbles, Mr Mike, Scanlon, Mary, Scott, John, Scott, Tavish, Simpson, Dr Richard, Smith, Elaine, Smith, Iain, Smith, Mrs Margaret, Stone, Mr Jamie, Thomson, Elaine, Tosh, Mr Murray, Wallace, Ben, Wallace, Mr Jim, Watson, Mike, Whitefield, Karen, Wilson, Allan

Photo of George Reid George Reid Scottish National Party

The result of the division is: For 33, Against 82, Abstentions 0.

Amendment 179 disagreed to.

Photo of Jackie Baillie Jackie Baillie Labour 6:00 pm, 13th June 2001

At stage 2, I expressed my sympathy with the broad intention behind amendment 476, which was lodged by Cathie Craigie. As members may recall, I gave Cathie and the other members of the Social Justice Committee a commitment to lodge an Executive amendment at stage 3.

Amendment 139 introduces a review mechanism for cases in which the grant applicant considers that their contribution has been incorrectly assessed by the local authority. The review will be conducted by a senior person in the local authority.

Cathie Craigie said at stage 2 that a review would be more appropriate than an appeal, and we agree with her. Local authorities feel that a review would be faster and less cumbersome, which is why an amendment along those lines was suggested.

Amendment 148 will make a minor amendment to a consequential provision. Members are probably aware that under the Housing (Scotland) Act 1987, the powers and functions of local authorities to make grants are applied to Scottish Homes. The bill already contains provision to change that so that the new executive agency can carry out those functions and use those powers if required, after Scottish Homes' functions are transferred. Amendment 148 simply replaces the word "power" with the word "function", which is more appropriate in the context.

I move amendment 139.

Amendment 139 agreed to.