I agree with the hon. Members for Bexhill and Battle (Mr. Barker) and for Billericay (Mr. Baron) that infrastructure is essential. However, those of us who represent areas with very high demand face many of the same problems. In the past week I have met residents of the Dalgarno estate in north Kensington and the Warwick and Brindley estate in north Westminster, which consists of six 20-storey tower blocks and a low-rise estate. They are currently arguing with the council and registered social landlords about the building of additional infill accommodation. Those residents point to a level of density and a pressure on housing, particularly for those on low incomes and with high levels of social need.
I am not a popular person with those residents because I am prepared to say to them that we must tackle the issue of additional housing provision. I understand all their reasons for not wanting to do that, but housing demand and the problems that it causes are so acute and intense that we cannot hold out against such provision. We must concentrate our arguments on the problem of infrastructure. We need a regional solution for London, and that must be set in a wider context. In the old days of the Greater London council, its seaside housing initiative was one of the most successful housing policies ever run by a public organisation. It made a positive contribution to the problem of housing need, and I would like such an initiative to be revived.
The hon. Member for Bexhill and Battle picked up on the reference to regional policy in my intervention. There is no flood of housing demand from the north of England that must be turned around. We are not dealing with that kind of population growth in London. My constituency contains two local authority areas—Kensington and Westminster—with the highest population growth in the country, but there is no huge influx of people from other regions with low housing demand. The problem in London arises from several factors, including the decline in social lettings during recent years, much of which is attributable to the impact of high house prices leading to people not moving out of social accommodation. Household formation and international migration, including asylum seekers—although that is a smaller and often overrated aspect of the problem—have also caused some rise in demand. A large part of the problem is the collapse of the private rented sector for people on low incomes. That must be dealt with.
My major point, which I have made a thousand and one times to the Minister and others, is about London, its problems and the need for assistance in dealing with them. London now has 52,000 households in temporary accommodation—the highest number on record. London's boroughs are accommodating a homeless population the size of Reading. There are nearly 3,500 homeless people in my constituency alone, including 450 in bed-and-breakfast accommodation. London has two thirds of the homeless households and three quarters of the total number of families in bed and breakfast in the country. Yet the funding formula is skewed against the capital, despite the extra investment allocated to us through the comprehensive spending review, which I recognise and warmly welcome.
The distribution formula is about to cause us serious problems. Those problems are relative. I accept that there is still growth, but that growth is not adequate to deal with the trend of housing need. Factors relating to low demand are included in the general needs index formula, but issues of affordability and household population growth, as mentioned by my hon. Friend Ms King, are not. The relative loss to London—taking into account what we should receive—is £128 million, which is equivalent to around 1,300 additional housing units. It is unacceptable and inexplicable that areas with high housing demand, which are in housing crisis, should be penalised by the funding formula. That is counter-intuitive, contrary to the objectives of the housing Green Paper and will make the work of the bed-and-breakfast unit much harder.