Housing (Southwark)

– in Westminster Hall at 4:28 pm on 7 April 2010.

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Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change 4:28, 7 April 2010

Thank you very much, Mr. Howarth, for calling me. I also thank Mr. Speaker for selecting this debate, which will be the last Westminster Hall debate of this Parliament. I am very privileged to have that opportunity.

I have chosen for this Adjournment debate the subject of housing in Southwark. Like you, Mr. Howarth, I have been a Member of Parliament for a long time. I have been the Member of Parliament for the northern part of Southwark for more than 27 years, and for the constituency that is currently called North Southwark and Bermondsey since the boundaries were redrawn in 1997. This debate will also be the last Adjournment debate in which I have the responsibility of representing that particular constituency. Although I hope to be back in the House after the election, the boundaries will be changed again slightly and the constituency will have the new name of Bermondsey and Old Southwark from next Monday.

Whatever the name of the constituency, however, the issue that has dominated my constituency work for all my time as a Member of Parliament is housing. You and I have that in common, Mr. Howarth, as constituency MPs. Of course, there have been other issues that I have had to address, but housing has been the main one. So it is absolutely right that I use this last opportunity in this Parliament to raise housing with the Government, because there are some very specific concerns that I would like the Minister to address when she responds.

Southwark is unique among London boroughs in that it has more than 40,000 local authority tenants and 12,000 local authority leaseholders who are tenants and leaseholders of the borough itself. I also have the privilege of representing many tenants and leaseholders of the City of London corporation, which has estates in Southwark, so I deal with two local authorities.

According to the new electoral register, the electorate within the boundaries of the new constituency is 84,899, which is one of the largest electorates in the country. Obviously, if we add on the people who are not on the electoral roll, because they are too young or otherwise not eligible to vote, we are talking about a population of probably 120,000 or 125,000.

For many of those people, there is a problem because they either cannot find a home-normally a home to rent-at an affordable cost, whether that is a local authority home, a home provided by a registered social landlord, housing association or housing trust, or a rented home in the private sector, or they are in a property that is still not of the standard that you, Mr. Howarth, or I would wish our constituents to live in.

The issue for them and for me is how we help them, particularly those people on relatively low incomes who cannot afford the sort of prices that properties go for along the river in my constituency, which stretches from the Oxo tower to Deptford, where some of the property prices are very high. Many of them have lived here all their lives, others have lived here for a long time and some have come here more recently. But the issue is how we can ensure they have the sort of housing they need.

I have the privilege of being the Member of Parliament in England who represents the highest number of council tenants as a proportion of their electorate. I have always taken that responsibility seriously. Therefore, much of what I want to say today is about providing support for local authorities-in this case, Southwark and the City of London-in the job that they want to do of housing our constituents.

As I have said, there are more than 40,000 Southwark tenants and 12,000 Southwark leaseholders. In Southwark, there are the same number of council properties as in Wandsworth, Westminster and Hammersmith and Fulham put together, or as in Lambeth and Tower Hamlets put together. I think that, in England, only Leeds and Birmingham have more council housing stock than we do in Southwark, and they are much bigger authorities and much bigger places than Southwark, which has a total population of about 250,000.

Eight years ago, for the first time since the London boroughs were created, Labour lost its overall majority in Southwark and the Liberal Democrats became the largest party in the borough, both in votes and seats. The Liberal Democrats took over as the minority administration for four years and for the last four years we have led a coalition administration. So my colleagues have had to take responsibility for housing and they have done so to the best of their ability.

Many good things have been done in that time. I am pleased to say that, just the other day, a housing league table produced by Shelter showed that

"Southwark ranked nineteenth out of 323 councils nationally, and fourth out of the 33 London boroughs, based on the percentage of affordable housing it provided of the 2009 requirement."

According to Shelter:

"Southwark Council delivered 74 per cent of the amount of affordable housing that was needed."

Southwark council has done very well, but to be honest that is a drop in the ocean. As of today, the number of people on the housing waiting list who are either in private sector accommodation, including bed and breakfast accommodation, of no fixed abode or living at home with somebody else, is about 15,000. In my judgment, it would take at least five years to house that number of people. We now have a banding system. If someone is in the top band, they are likely to be housed very quickly, but if they are in bands 3 or 4, it will take much longer.

The housing requirement study that was compiled for the council in 2008 called for 10,660 additional dwellings to be built by 2013 to satisfy housing requirements in Southwark. So, irrespective of the work that we need to do to improve our housing stock, there is without doubt a job to be done to build more homes. Indeed, there is another job to be done, which is to bring any empty properties back into use. Those properties are normally in the private sector, for example, flats over shops on the Old Kent road, the Walworth road or elsewhere in the borough.

The Communities and Local Government Committee recently produced its fourth report of the 2009-10 Session, dated 8 March 2010. It was a very welcome report called "Beyond Decent Homes". A few years ago, the Government announced a very good initiative, saying that there should be a decent homes programme to bring local authority housing stock up to a better standard. Much of that work has been done. However, one of the Select Committee recommendations was that the Government need to pay much greater attention to where the funding will come from to complete the work on the decent homes programme that was begun all those years ago.

That work was originally due to end this year, but the end date was put back to 2011, specifically to the end of the financial year that began this week. I would like to quote from recommendation 18 of the Select Committee's report, on page 92. Under the heading "Access to Public Funding", it says:

"We welcome the Minister's suggestion that reform of the HRA"- the housing revenue account-

"will enable all local housing authorities to fund the maintenance of their homes at a decent level. We note, however, that the Minister's replies were significantly weaker on the question of how retention authorities can bring their stock up to that level in the first place."

I will pause there for a moment. For the record, a "retention authority" is a council that decided to retain ownership of its property. Southwark council made that decision. There are currently four parties on the council: there are councillors from the Liberal Democrats, Labour and Conservatives, along with one Green councillor. All those parties in Southwark have always supported the view that the council should retain control of its housing stock and not divest itself of that stock. Whenever that view has been tested among the people who live in council property in Southwark, it has overwhelmingly been that of those tenants, too.

So there is a political consensus in Southwark that we want to retain our council housing. Therefore, the question of where the funding for that housing comes from is a key one for Government. The Select Committee's report went on to say:

"HRA reform will not solve that problem. We call on the Government urgently to set out how, post-HRA reform, authorities which have retained management of their stock will be funded to eliminate the backlog of non-decent housing."

The amount of housing debt that has been incurred in Southwark is extraordinary. Southwark council has a housing debt of-wait for it-more than £700 million. That debt costs £50 million a year just to service. Why do we have such a big debt? We have it for very obvious historical reasons. The London borough of Southwark inherited its housing stock from the three previous boroughs that made up the borough-Bermondsey, Southwark and Camberwell-and from the Greater London council. It has a huge amount of stock that was built after the blitz and other wartime raids, so a lot of our property was built in the 1940s, 1950s and 1960s. Some of it predates the 1940s-we had the first council housing in England-but a lot of it is post-war.

That post-war housing was built but not fully paid for, because the money was borrowed, and Southwark council is still paying for it today. The new council in Southwark will be elected on 6 May. Hopefully, the new administration will be made up again of my Liberal Democrat colleagues and ideally without our having to rely on making any arrangement with anybody else. Whoever makes up that administration, however, they will be desperate to have the ability to spend money on housing and not on paying off the debts for our properties, many of which no longer exist, having been demolished a long time ago. Therefore, the first problem is that we have a huge housing debt.

Secondly, we have to borrow all the time to refinance our loans and are not allowed to borrow at market rates; we have to borrow at rates of about 9 per cent. If the Government did not intervene and the council was allowed to get on, it could borrow at a much lower interest rate. Borrowing at a rate of 3, 4 or 5 per cent. would release a huge amount of extra money that could be spent on repair, renovation or building new housing stock.

Sadly, during the past 13 years of Labour Government, we have seen council house building decline across the country to the lowest figure since the war. It is a paradox; it is strange to me that there was no great new dawn for local authority housing as I had assumed that there would be in 1997. Less council housing has been built under Labour than under the previous Tory Government.

Many of my constituents have suffered a double whammy from the combination of authorities that have been in charge at a higher level than the local council. For many years we had a Tory Government who were actively hostile to the need to invest in the condition of our housing stock. In the old days, when Labour ran it, we had a council that did some good things, but it certainly did not manage to keep its estates up to scratch. That is why, in 1997, I and all my constituents, whatever their political views, hoped that we would get a better regime under which to work. Sadly, one telling fact is that since 1997, across the whole country, only 2,700 council homes have been built, but, in the same period, the Government have built nearly 20,000 prison cells. It says something that a Government would build seven times more prison cells than council homes. I think that my constituents would have strong views about that priority-it is wrong.

I have acknowledged the benefit of the decent homes programme. Millions of pounds have been poured into bringing homes up to scratch, but there have been two unattractive aspects of the programme: first, a centralised, target-driven approach that prevents local discretion, and, secondly, a failure of Government to understand that local councils should be given choice.

Let me amplify the first point: a home does not have to have a working lift to be defined as decent. There is money to improve a door, a sink, a bathroom or a toilet, but there is no money to get the lifts working well. To be honest, for someone living on the 11th floor, having a new bathroom is probably a secondary priority to ensuring that the lifts work.

On choice, in 2001 there was a ballot of every tenant on one of the largest Southwark estates, the Aylesbury estate, a small part of which is, until next Monday, in my constituency, although it then becomes in its entirety part of the Camberwell and Peckham constituency. The vote was on whether the estate should be demolished and replaced by new housing built by a registered social landlord. The turnout was 70 per cent.-probably higher than we will get in many places on 6 May, certainly at local government level-and there was a three to one vote against the transfer. The tenants wanted the Government to invest in the estate to bring it up to the state of repair needed. That would have cost hundreds of millions of pounds, and the Government would not come up with the money.

Elsewhere, people were told that if they went for an arm's length management organisation or if the council sold off the housing estate, they would get the money. Southwark tenants and politicians said that they did not want to do that. We wanted to run our own show, and no money was forthcoming. It is a paradox that Lambeth next door, which is a Labour-run authority, voted for an arm's length management organisation, but is still waiting for the £200 million promised, as I understand it, for voting for an ALMO.

If we are to get people to trust in local government, we should, first, give them choice about how they spend money and, secondly, not discriminate or give money based on the sort of management the council chooses. If people want the council to continue to own the housing, they should be allowed to have the council own the housing.

We have a huge number of tower blocks and still have many homes that do not meet the definition of a decent home. We-the council, tenants and residents-still aspire to have homes that do not just meet the basic decent homes standard but do more than that, particularly environmentally, to ensure that they are insulated well, energy efficient and so on.

I have made the point that we ought to allow councils full local discretion about how they spend any money the Government give. I hope that the Minister will say that the Government are now more sympathetic to that and that they will leave that recommendation on their desks for their successors. I hope that the Government will say that, in future, they will not discriminate among councils based on the sort of structure the council wants for its organisation with its tenants, and that councils should be able to borrow at the lowest commercial rate. I hope that the Minister will either reassure me today or take the point back to the Secretary of State before the Government ceases to be the Government. Whatever happens at the election, the Government and Ministers will change, and some of us hope that the governing party will change, too. I hope that a new regime will allow us to refinance our debt so that we are not using all the money to pay off debts from the past, and can get on with repairing and building homes for the future.

Southwark is a very attractive place for investment, as the Minster knows, and as do you, Mr. Howarth. Even in the middle of the worst recession since Neville Chamberlain was Chancellor of the Exchequer, we are building what will be the tallest building in London at London bridge: the Shard of glass. It is still ridiculous that the local authority cannot spend the money that the developers pay on improving the local housing estates or building new housing. It has to be spent on other things. In my Town and Country Planning Act 1990 (Amendment) Bill, I tried to change that, but both Labour and Tory Front Benchers prevented it from going through in this Session. I regret that. I hope that the Government will have second thoughts and that the Labour and Conservative parties will come to support the proposals. In the coming election campaign, it will be interesting to hear my Labour and Tory opponents explain why their parties were so unhelpful about that measure.

Leaseholders also need a better deal. I tried to get a Bill through in this Parliament, as did Mrs. Lait, which would have improved the lot of leaseholders who have high bills. That is the other change that people in Southwark would notice most as improving their housing.

Southwark local authority spends about £40 million to £60 million annually on decent homes, £40 million on other improvements and landlord obligations, and £50 million on debt repayment. We are willing to take on our responsibilities. The political leadership-my colleague Nick Stanton who leads the council and his colleagues-are absolutely willing to do that, but we must have a Government regime that helps councils do what they want to do. My plea is: help people to live in the homes that they aspire to. Let us have homes fit not only for heroes but for everyone, and push housing up the social agenda.

In the general election campaign, I hope that we can ensure that we understand the extent of the housing crisis and the shortage of housing in a borough such as Southwark. I hope that the new council and the new Government will have a much more open, honest and generous way of funding housing, which is still the major concern of my constituents.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary (the East of England), Department for Communities and Local Government 4:48, 7 April 2010

Thank you, Mr. Howarth, for presiding over this, the last Westminster Hall Adjournment debate of this Parliament. It is not my last because I have the honour of doing the end of day Adjournment debate as well.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary (the East of England), Department for Communities and Local Government

Yes, whenever that may be.

I congratulate Simon Hughes on securing the debate and on his very evident care and concern about a problem that your constituents, Mr. Howarth, and my constituents share with his constituents. Housing is a huge agenda and a problem across the country, from the areas where there is a surplus of or not good enough housing, to areas such as my own and Southwark where supply is too constrained for the number of people in the area.

Southwark is a particularly harsh case. The council is already the largest social landlord in the capital and the population continues to grow apace. It increased by 23 per cent. between 1981 and 2006, whereas the population in the rest of London increased by only 10.4 per cent. That gives an understanding of the problem that the hon. Gentleman is talking about. The population of Southwark is projected to grow by about 35,000 by 2016 and a further 46,000 by 2026. It was timely of him to raise this significant problem in the final Adjournment debate of this Parliament in Westminster Hall. We need sufficient good-quality housing in Britain and in Southwark in particular.

In Southwark, housing has been the cause of some tragic events. The fires at Lakanal house and a few weeks later in Peckham underlined the importance of safety measures in residential blocks. Yesterday's events in Southampton, which are fresh in our minds, reminded us of the need not just for good housing, but for housing that is safe and secure.

The Government are committed to housing. Like the hon. Gentleman, we want it to be of good quality and of the kind that local people want. The main problem with retention councils is that the money they need counts against the national debt. That is why my constituency eventually opted for an arm's length management organisation. It got the money and has built more homes than anywhere else in the east of England. That shows that it can work. This is not an ideological problem, but a financial one. The alternatives that the Government offered were private finance initiatives and registered social landlords.

I understand why the people of Southwark wanted to be retained, but because that adds to the national debt, there is a break on development. The Government have been incredibly aware of that problem, in particular the Minister for Housing, who on 25 March announced a far-reaching new deal to give local authorities the freedom that the hon. Gentleman spoke about to fund and run their council homes without central Government subsidy.

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

The tradition that local authority spend counts against the public sector borrowing requirement is an accounting requirement. Many countries do not count local authority spend or borrowing in that way and the Government could change the requirement if they wanted to. I know that the Treasury has resisted that, but if it were changed, it would not be the issue that it has been.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary (the East of England), Department for Communities and Local Government

I understand the hon. Gentleman's argument, having deployed it myself. However, Her Majesty's Treasury does not look kindly upon that financial or accounting ploy.

The deal that the Minister for Housing came up with will release at least 10 per cent. more money in every local authority to maintain and manage homes. It will also create the funding and capacity to build more than 10,000 new council homes a year across the country by the end of the next Parliament. Under the deal, local authorities will keep all the rent they collect from their homes and all the receipts from the sale of housing or land. Not a single penny will go to Whitehall or subsidise other councils. Southwark stands to benefit significantly from the deal.

Since 2001, we have reduced the number of non-decent homes in the social housing sector by 50 per cent. and 1.4 million council houses have been improved. The Government have invested £18.8 billion and councils have added £4.4 billion. Southwark council decided to deliver a higher decent homes standard than that set out by the Government. That solution will be more costly and take longer to deliver. The decision was understandable, but it was entirely that of Southwark council. As I said, the Government are committed to completing the decent homes programme. We recognise that £3.2 billion of works are still needed to meet the commitment. That will be a central element in our decisions on investment priorities in the next spending review should we be returned after the general election.

The hon. Gentleman raised the question of writing off all housing debt. We cannot do that, but if self-financing were implemented, Southwark council would receive a cheque for £306.9 million from the Government. Self-financing would enable councils to manage their homes on much the same basis as arm's length management organisations. That would give councils the freedom to manage their finance without the interference of central Government.

On the hon. Gentleman's last two points, I have read his private Member's Bill. It sought to secure additional funds for decent homes through section 106 agreements. As he knows, the arguments on the Bill and the role of section 106 agreements are well rehearsed. I reiterate that the basic aims of the Bill are already Government policy and its objectives can be secured through other measures. On 6 April, we brought in new regulations on this matter. It is not the Government's intention that section 106 receipts be used to improve existing housing conditions or to secure a share in the profits of development for the community. Section 106 is a planning instrument that is intended to make particular development proposals acceptable in planning terms, rather than to achieve wider policy objectives.

I understand the hon. Gentleman's concerns about leasehold. I commend his work in this area, which has benefited his increasing number of constituents over the years. The Government acknowledge that the housing position in Southwark must be addressed urgently.

Photo of Simon Hughes Simon Hughes Shadow Secretary of State for Energy and Climate Change

I am grateful for the Minister's kind remarks. I ask her to take away two things. First, the Government must take on board the fact that following the fire deaths that happened in my borough but outside my constituency, there is a need for additional health and safety work in boroughs such as mine that have many tower blocks. Secondly, if the debts will not be written off, it would be helpful if Ministers and civil servants could consider ways in which debt can be refinanced and reprogrammed so that it does not cost as much, particularly for boroughs that have a large amount of council and public sector stock and that want to maintain the quality of it in generations to come, when additional numbers of people will be knocking on the door asking to be housed.

Photo of Barbara Follett Barbara Follett Minister of State (the East of England), Regional Affairs, Parliamentary Under-Secretary (the East of England), Department for Communities and Local Government

I hear what the hon. Gentleman is saying. It is apt that the Westminster Hall debates of this Parliament are closing on a subject on which there is cross-party accord. Although I will not be involved because I am standing down, I hope that the parties can work together to solve this problem.

Question put and agreed to.

Sitting adjourned.